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Sunday 20 March 2016

NEWSLETTER, 20-III-2016

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC. 


1.1. President highlights progress in ease of doing business
1.2. 'Sustainable Development is our priority': Prime Minister
2.1. 5930 Villages Electrified Till Date Under DDUGJY, 305 Villages Electrified Last Week
2.2. Record 323 villages electrified in week ending March 13
3.1. ONGC, Essar Energy arm strikes gas in Mumbai High
3.2. Energy shortage is down to 2.3% from 4%: President
4.1. Government plans eight National Investment and Manufacturing Zones (NIMZs) along Delhi Mumbai Industrial Corridor (DMIC) project
5.1. Big Boost to the Railway Sector: CCEA approves construction of additional Railway lines
5.2. Together with the Capital Expenditure of the Railways, the Total Outlay on Roads and Railways Proposed at Rs 2,18,000 Crore (~$33 bn) in 2016


– AGRICULTURE, FISHING and RURAL DEVELOPMENT


6. Budget 2016-17 presented in Parliament; major focus on agriculture and farmers' welfare 28.5 lakh Hectares to be brought under irrigation
7. PM unveils operational guidelines for Pradhan Mantri Fasal Bima Yojana and announces National Agricultural Market for farmers
8. 100 per cent FDI In multi brand marketing of food to act as catalyst for the food processing sector - Ms Harsimrat Kaur Badal
9. India ranks first in milk production, accounting for 18.5 per cent of world production
10. Solar energy parks gain momentum in India


– INDUSTRY, MANUFACTURE


11.1. Make in India week ends with Rs 15.2 trillion ($221 bn) of investment commitments
11.2. Make More in India': Why IKEA is beefing up its manufacturing ahead of its store launch
12.1. Honda starts world's largest scooter plant in Gujarat
12.2. Ford, GM to operate India factories round the clock
13.1. Cipla completes $550 mn acquisition of two US firms
13.2. Lupin eyes buyouts in specialty product business
14.1. Encourage large investments in the petrochemical sector: Supreme Ind MD Taparia
14.2. Electronics manufacturing gets a boost with ₹700-crore venture capital funding
15.1. Havells plans manufacturing unit near Bengaluru
15.2. Xiaomi's Barra says looking to step up manufacturing in India
15.3. OnePlus partners Foxconn to start manufacturing in India


– SERVICES (IT, R&D, Tourism, Healthcare, etc.) 


16.1. R&D incentives will help auto companies
16.2. Lowe's sets up innovation lab in India
17.1. Airbus sees demand for 1,600 planes in India
17.2. Grounded for 5 years, ‘Made in India’ plane awaits DGCA nod
18. Will refine Tata Motors, not reinvent it: CEO Butschek
19. Extension of e-Tourist Visa scheme to 37 more countries
20.1. Indian e-commerce market to grow fastest globally over 3 years: Morgan Stanley
20.2. Amazon to set up its second largest global delivery centre in Hyderabad


INDIA & THE WORLD 

21. IMF and India to Set-Up a South Asia Regional Training and Technical Assistance Center (SARTTAC) in Delhi
22. Asia's oil markets in upheaval as China, India change the game
23. Modi praises Islam for its message of peace, harmony
24. Global pension, sovereign wealth funds to invest US$50 bn in infra
25. World Bank approves US$1.5 billion to support India’s universal sanitation initiatives

* * *
Newsletter, 20-III-2016


INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC. 


1.1. President highlights progress in ease of doing business 
The Hindu | 23 Feb. 2016 

Painting a rosy picture of the economy, the President Pranab Mukherjee on Tuesday highlighted the rapid strides made on the economic front including the rise in 12 ranks in the World Bank’s ease of doing business list. 

Notably, the Make in India initiative has achieved a 39 per cent increase in foreign direct investment (FDI) inflow despite an adverse global investment climate, Mukherjee said in his address to joint sitting of Parliament on the first day of the Budget session. 

He also highlighted that the ruling dispensation at the Centre has fostered “competitive cooperation” among various States to enhance Ease of Doing Business. 

“State governments are being encouraged and supported to simplify procedures, introduce e-enabled processes and invest in infrastructure to improve the investment climate,” he said. 
Procedures have been simplified to enhance ease of approvals/clearances. 
A series of reforms have been initiated to help convert job seekers into job creators. The Start Up India campaign, which was launched recently, would deepen, expand and support the innovation ecosystem in the country, he said. 

Electricity 
Mukherjee also said that the Centre was committed to providing electricity to all the census villages by May 2018. 
Since the NDA assumed office, energy shortages have been reduced from 4 to 2.3 per cent. In 2015 India witnessed the highest ever generation of electricity. 
Mukherjee also said that a landmark agreement with Japan will make the Mumbai-Ahmedabad high speed rail corridor a reality. 
The Centre has also awarded two mega projects for setting up diesel and electric locomotive factories at Marhaura and Madhepura respectively. 

By March 2019, under the Pradhan Mantri Gram Sadak Yojana, 1,78,000 rural habitations will be connected with all weather roads, he said. 
A majority of the 73 stalled road projects have been revived; 7,200 km of highways construction have been completed, Mukherjee said. As many as 12,900 km of highway projects have been awarded. This is the highest ever number of new highway kilometres awarded. 

Governance 
Stating that significant steps have been taken to reform institutions, simplify procedures and repeal obsolete laws, Mukherjee said that close to 1,800 obsolete legislations are at various stages of repeal. 
“While on the one hand, my government has taken measures to eliminate the scope for corruption, on the other hand, it has been unsparing in punishing those who are found guilty of corruption,” Mukherjee said. Stringent amendments to the Prevention of Corruption Act are also on the anvil to address the perceived gaps in the anti-corruption law, he said.


1.2. 'Sustainable Development is our priority': Prime Minister 
Press Information Bureau | Mar. 07, 2016 

New Delhi: The Prime Minister, Shri Narendra Modi, has emphasized that sustainable development is our priority. Delivering the inaugural address at the International Conference on Rule of Law For Supporting the 2030 Development agenda/Sustainable development goals here today, the Prime Minister said that the ideals of ‘Bahujan hitay, Bahujan sukhay’ (well being and happiness of the maximum number of people) cannot happen unless the development process is inclusive and sustainable. He said that the government aims to encourage education, skill development, digital connectivity and entrepreneurship in a sustainable manner. He also said that anything which is not sustainable, cannot be called development. 

The Prime Minister said that poverty is the biggest challenge for environment and eradication of poverty is one of the fundamental goals of the government. Shri Modi said that the poor, vulnerable and marginalized groups have fewer resources to cope with climate disasters. He underscored the need to look within to make a meaningful impact on environment. Reiterating the need for Climate Justice, the Prime Minister stated that rules, laws, practices and principles of one country cannot be applied to another uniformly. The Prime Minister said that India’s commitments at COP-21 underline the Indian ethos, which aim at changing human lifestyle along with changes in the manner in which economic activity is undertaken. 

Addressing the gathering, Minister of State (Independent Charge) of Environment, Forest and Climate Change, Shri Javadekar said that the Prime Minister convinced the world at Paris about Climate Justice and sustainable lifestyle. The Minister said that Climate Justice is about justice to the 3 billion poor people of the world. Shri Javadekar said that both the concepts of Climate Justice and Sustainable Lifestyle have been mentioned in the Preamble of Paris agreement. 

Shri Javadekar said that the Finance Minister has presented a Green Budget. Highlighting the green features of the Union Budget 2016-17, he said that coal has been taxed to the tune of Rs. 400 per tonne, i.e about $ 6. He emphasized that no country in the world is taxing coal for $6 per tonne. Shri Javadekar added that if the developed world follows India’s example in taxing coal at $ 6 per tonne, $ 100 billion to be generated by the developed world to meet the mitigation and adaptation needs of the developing world will be collected through this $ 6 tax. The Minister said that some of the other green features of the Budget include the benefit of LPG being extended to 50 million BPL families, which is not just a health benefit, but also saves cutting of trees. Shri Javadekar emphasized the commitment of the government by preponing the migration to Euro VI by 2020, by investing Rs. 60, 000 crore in refineries to have cleaner fuel. 

Speaking on the occasion, Union Finance Minister, Shri Arun Jaitley pointed out that the proposals presented in Budget 2016-17 pertain not only to coal and fossil fuels, but also towards hydrocarbons. The Finance Minister said that two important programmes on environment are Swachh Bharat and Clean Ganga campaigns. He pointed out that the 0.5% cess on all services will go only towards Swachh Bharat campaign. He also added that adequate money for Clean Ganga campaign has been provided. Shri Jaitley also said that as part of the Clean Ganga campaign, the most polluted stretch from Kanpur to Varanasi is being taken up for cleaning River Ganga. The Finance Minister emphasized that the decision to provide LPG connections to mitigate the adverse impact of ‘chulha’ is not only a social sector scheme, but also an environmental programme. He also stated that while hybrid and electric vehicles have been encouraged, more polluting vehicles have been discouraged. 

The Prime Minister released the National Green Tribunal International Journal on the occasion. Chief Justice of India, Shri Justice T.S Thakur delivered the keynote address, while National Green Tribunal Chairperson, Shri Justice Swatanter Kumar gave the welcome address. Attorney General of India, Shri Mukul Rohtagi also addressed the gathering. Director, Division of Environmental Law and Conventions, UNEP, Ms. Elizabeth Maruma Mrema gave the Vote of thanks. 
The three-day Conference has been organized by National Green Tribunal NGT), Ministry of Environment, Forest & Climate Change, Ministry of Water Resources and United Nations Environment Programme (UNEP). The objective of the Conference is to bring together Chief Justices, judges, environmentalists, scientists, lawyers, academicians, executives in the field of environment to exchange ideas on environmental issues such as climate change and disaster management, threat to marine environment, waste management and air pollution. Some of the other issues to be deliberated include – global warming, marine environment, rule of law, remedies and judicial mechanism, increasing pollution and the impact on forest, wildlife and environment. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


2.1. 5930 Villages Electrified Till Date Under DDUGJY, 305 Villages Electrified Last Week 
Press Information Bureau | Mar. 01, 2016 

305 villages have been electrified across the country during last week (from 22nd to 28th February 2016) under Deen Dayal Upadhyaya Gram Jyoti Yojna (DDUGJY). Out of these electrified villages, 53 villages belong to Odisha , 48 in Jharkhand, 44 in Arunachal Pradesh, 42 in Bihar , 34 in Chhattisgarh, 34 in UP, 25 in Rajasthan ,14 villages in Assam, 10 in Manipur and 1 village in Madhya Pradesh, and The progress of ongoing electrification process can be tracked on http://garv.gov.in/dashboard 

An update on ongoing electrification process: 
In view of the Prime Minister, Shri Narendra Modi’s address to nation, on Independence Day, Government of India has decided to electrify remaining 18,452 un-electrified villages within 1000 days i.e. by 01st May, 2018. The project has been taken on mission mode and strategy for electrification consists of squeezing the implementation schedule to 12 months and also dividing village electrification process in 12 Stage milestones with defined timelines for monitoring. 

During 2015-16, 5930 villages have been electrified till date. Out of remaining 12,522 villages, 8678 villages are to be electrified through grid, 3355 villages are to be electrified through off- grid where grid solutions are out of reach due to geographical barriers and 489 villages are to be electrified by State Govt own. Total 1654 villages were electrified during April 2015 to 14th Aug 2015 and after taking initiative by Government of India for taking it on mission mode, 4276 additional villages have been electrified from 15th August 2015 to 28th February. In order to expedite the progress further, a close monitoring is being done through Gram Vidyut Abhiyanta (GVA) and various actions are also being taken on regular basis like reviewing the progress on monthly basis during the RPM meeting, sharing of list of villages which are at the stage of under energisation with the state Discom, identifying the villages where milestone progress are delayed. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


2.2. Record 323 villages electrified in week ending March 13 
Hindu | 14 Mar. 2016 

A total of 323 villages have been electrified across the country under the Deen Dayal Upadhyaya Gram Jyoti Yojana, in the week ending March 13. 
Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy, tweeted that last week’s achievement in village electrification is the highest ever for a week. 

Of the 323 villages that were electrified, the maximum number were in Odisha (86), followed by Jharkhand (73), Uttar Pradesh (61), Arunachal Pradesh (42), Bihar (33), Assam (16), Chhattisgarh (6), Madhya Pradesh (3) and Rajasthan (3). 
From April 2015 till date, 6,493 villages have been electrified. Of the remaining 11,959 villages, 8,219 villages will be electrified through the grid, 3,267 villages will be electrified through off-grid solutions, and 473 villages will be electrified through the state government.


3.1. ONGC, Essar Energy arm strikes gas in Mumbai High 
Hindu | 22 Feb. 2016 | Tanya Thomas

A consortium of Oil and Natural Gas Corporation and an arm of Essar Energy have struck natural gas in the Mumbai High fields, an ageing reservoir in the Arabian Sea. 
According to sources close to the development, the consortium of ONGC and Essar Exploration and Production Ltd (Mauritius) has filed details of the discovery with the Directorate General of Hydrocarbons (DGH). 

The gas discovery was made in the first exploratory well of the Block MB-OSN-2005/3 in the Mumbai Offshore Basin, which the consortium bid for as part of New Exploration Licensing Policy (NELP) VII.
ONGC has 70 per cent participating interest in the block, while Essar holds the remaining 30 per cent with a production sharing contract with the government of India. 
ONGC is the operator of the field, while Essar mapped the target field. 

One of the sources quoted earlier said it would be premature to comment on the total resources in this well ahead of the appraisal, but estimates it to be in the 350-500 bcf (billion cubic feet) range. 
After the technical engagement with the DGH, the consortium will conduct a final appraisal of the discovery after which the reservoir will be delineated and commercialised. The whole process could take a minimum of 18-24 months, the source quoted above added. 
The discovery is significant geologically because it’s the first on the west coast in the Pliocene formation, a shallower shelf at a depth of about a kilometre below sea level.

“This opens a new cheaper petroleum system,” the source said, “as one can develop the discovery quite cost effectively. 
 “Developing an offshore well costs $25-50 million, spanning shallow to deep water resources. At 1,000 m, the well cost (here) could be as low as $5 million. It just needs simple assembly-line operations to be made commercial.” The Mumbai High reserves are typically at a depth of 2,000-2,500 m. 
An independent energy analyst agreed that if the field does go commercial, the monetisation can be done very quickly. 

“The infrastructure is already in place. With the low-cost development and drilling techniques, this can be quickly monetised.” 
The Mumbai High fields have been flagging over the past decade, with ONGC undertaking several drilling campaigns here to revive the reservoir. 
According to the November 2015 presentation, ONGC has gas reserves of 17.86 billion cubic metres (roughly 631 bcf). 
Essar Oil has in-place reserves of five tcf (trillion cubic feet) at its coal-bed methane fields, while the Mauritius company has partnered for reserves in Vietnam and Nigeria. 


3.2. Energy shortage is down to 2.3% from 4%: President PTI. 
The Hindu | 23 Feb. 2016 

"Eighty-three per cent of the capacity addition target of 88,537 MW for 12th Plan period has already been achieved," the President said. 

President Pranab Mukherjee today said the energy shortage in the country has come down to 2.3% from the earlier 4 % since the new government assumed office in May 2014. 
In his address to the joint sitting of Parliament, the President said the government is committed to providing electricity to all the census villages by May 2018. 
“Since the government assumed office, energy shortages have been reduced from 4% to 2.3%” he said. The government, Mukherjee said, has launched the Ujwal Discom Assurance Yojana (UDAY) for financial turnaround of power distribution companies of states and Union Territories. 

Jharkhand, Chhattisgarh, Bihar, Rajasthan, Uttar Pradesh and Gujarat have formally joined the UDAY scheme, which is meant for revival of debt-ridden power distribution utilities. 

“Eighty-three per cent of the capacity addition target of 88,537 MW for 12th Plan period has already been achieved,” the President said. 
He further said the government has introduced critical amendments in the tariff policy for ensuring availability of electricity to consumers at reasonable and competitive rates. The government, he said, has focused on commissioning major transmission projects for reducing congestion
 in transmission. 
“I am happy to share that available transfer capacity for South India has increased by 71% from May 2014 to December 2015. This has resulted in cheaper and abundant power in South India, finally moving towards the goal of One Nation, One Grid, One Price,” Mukherjee said. 

The President told the lawmakers that to revive gas-based power generation capacity the government implemented a new initiative of supply of refined LNG. 
This has ensured revival of stranded gas plants with installed capacity of 11,717 Mw, he said, adding that in 2015, India saw the highest-ever generation of electricity. 
The President further said two ambitious National LED Programmes have been launched for cities for street lighting and domestic lighting. 
“Through a bulk procurement strategy, the cost of LED bulb has been brought down from Rs. 310 in January 2014 to Rs.64 in January 2015,” Mukherjee said. 

On the coal sector, the President said the government has introduced dynamic and comprehensive reforms and conducted transparent auction/allocation of over 70 coal blocks. 
These, he said, will immensely benefit the eastern states in years to come. “Strong emphasis on increasing coal production has resulted in a record 9.8% growth in CIL’s coal production and highest-ever output of coal. This has also led to reduced imports of coal,” Mukherjee said. 

4.1. Government plans eight National Investment and Manufacturing Zones (NIMZs) along Delhi Mumbai Industrial Corridor (DMIC) project 
Press Information Bureau | Mar. 14, 2016 

New Delhi: The Government has announced eight Investment Regions along the Delhi Mumbai Industrial Corridor (DMIC) project as National Investment and Manufacturing Zones (NIMZs). The details are as under: 
i) Ahmedabad-Dholera Investment Region, Gujarat 
ii) Shendra-Bidkin Industrial Part city near Aurangabad, Maharashtra 
iii) Manesar-Bawal Investment Region, Haryana 
iv) Khushkhera-Bhiwadi-Neemrana Investment Region, Rajasthan 
v) Pithampur-Dhar-Mhow Investment Regioin, Madhya Pradesh 
vi) Dadri-Noida-Ghaziabad investment Region, Uttar Pradesh 
vii) Dighi Port Industrial Area, Maharashtra, and 
viii) Jodhpur-Pali-Marwar Region in Rajasthan. 

Fourteen NIMZs outside the DMIC region have also been given in-principle approval 
(i) Nagpur in Maharashtra, 
(ii) Prakasam in Andhra Pradesh, 
(iii) Chittoor in Andhra Pradesh, 
(iv) Medak in Telangana, 
(v) Hyderabad Pharma NIM in Rangareddy and Mahbubnagar Districts of Telangana, 
(vi) Tumkur in Karnataka, 
(vii) Kolar in Karnataka, 
(viii) Bidar in Karnataka, 
(ix) Gulbarga in Karnataka, 
(x) Kalinganagar, Jajpur District in Odisha, 
(xi) Ramanathapuram District of Tamil Nadu, 
(xii) Ponneri, Thiruvallur District, Tamil Nadu, 
(xiii) Auraiya District in Uttar Pradesh, and 
(xiv) Jhansi District in Uttar Pradesh. 

Out of these NIMZs, the NIMZs at 
(i) Prakasam in Andhra Pradesh and 
(ii) Medak in Telangana have been granted final approval. 

The National Manufacturing Policy is based on the principle of industrial growth in partnership with the States. It is the prerogative of the States to adopt the instrumentalities provided by the policy. 
For the Financial Year 2016-17, Rs. 3.35 crores has been earmarked under the ‘Scheme for Implementation of National Manufacturing Policy’ for ‘Master Planning of NIMZs’ and Technology Acquisition and Development Fund (TADF). 
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


5.1. Big Boost to the Railway Sector: CCEA approves construction of additional Railway lines 
Press Information Bureau | Feb. 18, 2016 

New Delhi: The Cabinet Committee of Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved construction of six Railway Lines and a Railway bridge to cater to both increased passenger and freight needs in various areas of the country. The proposals will cost over Rs.10,700 crore and most part of the expenditure will be met through extra budgetary resources (Institutional Financing). Details of the six approved projects are as follows: 

1) Doubling of Hubli-Chickajur railway line 
Doubling of 190 km long Hubli-Chickajur broad gauge single railway line has been approved. The total estimated expenditure will be Rs.1294.13 crore. The project is likely to be completed in 4¼ years during 13th Plan period and will cover the areas of Chitradurga, Davangere, Haveri and Dharwad. 

Entire route from Pune-Miraj-Hubli-Bengalore has been identified for doubling which will not only improve smooth flow of traffic but also boost overall development of the region.

This stretch is part of an important rail link of passenger trains between Mumbai and Bangalore and goods trains to the ports at Mangalore. On this route, doubling between Bangalore-Tumkur and Arsikere-Chickajur have already been completed. On balance portion, doubling work between Hubli-Londa part of Hubli-LondaVasco-da-Gama, is also in progress. 

2) Construction of Wardha (Sewagram) – Ballarshah 3rd railway line 
Construction of Wardha (Sewagram) – Ballarshah 3rd railway line of 132 km will be taken up at an estimated completion cost of Rs.1443.32 crore. The project is likely to be completed in five years during 13th Plan period and will be located in Wardha and Chandrapur districts. 

The line capacity utilization of the section is saturated and running of additional Mail/Express and Goods traffic over the section cause detention to the trains. Wardha (Sewagram) – Ballarshah section is very important from goods originating point of view of Nagpur Division where many collieries and many sidings are proposed on the section. 

3) Doubling of Ramna-Singrauli railway line 
Doubling of 160 km long Ramna – Singarauli railway line has been approved at a cost Rs.2675.64 crore and is likely to be completed by 2019-20. The project will cover the districts of Garhwa in Jharkhand, Singrauli in Madhya Pradesh and Sonbhadra in Uttar Pradesh. 
The Ramna-Singrauli section falls in Dhanbad Division of East Central Railway. At present traffic utilization of the section is 105%, resulting in detention of trains and loss of revenue. In order to attain the desired fluidity and increase in the sectional capacity, doubling of this single line section is very essential from operational point of view. The project will serve the freight and passenger traffic needs in the jurisdiction of Northern Coal Fields and series of power plants and associated small scale industries in and around Anpara and Shaktinagar, namely Anpara Super Thermal Power Plant, Rihand Super Thermal Power Plant, Renusagar Hydro Power Plant,Singrauli Super Thermal Power Plant, Vidhyachal Super Thermal Power Plant. 

4) Construction of 3rd railway line between Anuppur-Katni 
Construction of 165 km long 3rd railway line between Anuppur-Katni in Madhya Pradesh has also been apporved at a cost of Rs.1595.76 crore. The project is likely to be completed in 5 ¼ years spanning over 12th and 13th plan period. 

The project would cover the districts of Anuppur, Shahdol, Umaria and Katni districts of Madhya Pradesh. There has been tremendous surge in coal and one mining which has been geared up in the recent past and ambitious plans for an enormous leap forward in the ensuing years to tap these resources lying hitherto untapped. As a result of the rapid industrialization, number of industrial townships have also grown up along the project line. These developments have resulted in large demand for additional coaching services on the section. With this anticipated increase of freight traffic, the capacity utilization will reach upto 175%. Apart from this substantial additional coal traffic from IB valley, Korba area, East Corridor and Gevra Road – Pendra Road Project would be channelized through this route to the respective destinations. In order to meet the growth in the freight and passenger traffic, tripling of 3rd line between Anuppur-Katni is essential. 

5) Doubling of Katni-Singrauli railway line 
Construction of doubling of 261 km long Katni – Singarauli railway at a cost of Rs.2084.90 crore has been approved. The project will be completed in 5 ¼ years. The project would cover the districts of Katni, Shahdol, Sidhi and Singrauli in Madhya Pradesh. 

Katni-Singrauli is a critical and busy section carrying coal from Northern Coal Fields towards Western and Northern thermal power plants. This section intersects Allahabad-Mumbai route at Katni. Provision of doubling between Katni-Singrauli section would provide the necessary line capacity for introduction of additional mail/express and passenger trains to serve the people of the area and transportation of coal from collieries. This will also boost overall development of the region. 

6) Construction of additional Bridge and doubling project of Rampur Dumra-Tal-Rajendrapul 
Construction of additional Bridge and doubling project of Rampur Dumra-Tal-Rajendrapul sector in Bihar at a cost of Rs.1700.24 crore has also got CCEA’s approval today. 
The project is likely to be completed by 2019-20. The project is located in Begusarai and Patna districts of Bihar. 

The existing rail-cum-road bridge at Hathidah has single line track and doubling is not possible. Present traffic utilization of the section is 123.5%. At present this is the only railway bridge connecting both North and South Bihar. Existing single line has resulted in heavy detention of goods and passenger traffic. 

In order to streamline the operation of traffic in this single line section, it is very essential that one additional bridge and doubling of this section is undertaken. By providing this facility, there will be ample fluidity in maintaining train operations as well as introduction of more passenger/goods trains in the section and it will augment line capacity too. This will also facilitate in minimizing the running time of trains between KiulBarauni and Mokama-Barauni section and will ease out the existing operational constraints in this section. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


5.2. Together with the Capital Expenditure of the Railways, the Total Outlay on Roads and Railways Proposed at Rs 2,18,000 Crore (~$33 bn) in 2016-17 
Press Information Bureau | Mar. 01, 2016 

New Delhi: While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that Infrastructure and Investment is the Fifth Support Pillar of Budget Theme ‘Transform India’. A total outlay of Rs. 2,18,000 crore will be spent on capital expenditure of roads and railways in 2016- 17. For speeding-up of the process of road construction, an allocation of Rs. 27,000 crore has been purposed for Pradhan Mantri Gram Sadak Yojna (PMGSY) and Rs. 55,000 crore for Road Transport and Highways. Another Rs.15,000 crore are to be raised by NHAI through Bonds. An outlay towards capital expenditure of the Railways is proposed at Rs. 1,21,000 crore. 

Shri Jaitley announced that nearly 10,000 KMs of National Highways are expected to be approved in 2016-17. In addition nearly 50,000 KMs of State Highways will also be taken-up for up-gradation as National Highways. The total outlay for infrastructure in budgetary estimates 2016-17 stands at Rs. 2,21,246 crore.

He said that the Government will enact necessary amendments in the Motor Vehicles Act and open-up the road transport sector in the passenger segment. An enabling eco-system will be provided for the States which will have the choice of adopting the new legal framework. Entrepreneurs will be able to operate buses on various routes, subject to certain efficiency and safety norms. This will benefit the poor and middle class, encourage new investment, promote start up entrepreneurs and create new jobs. This is a major reform measure. 

“We are planning to develop new Greenfield ports both in the eastern and western coasts of the country. The work on the National Waterways is also being expedited Rs 800 crore has been provided for these initiatives”, the Finance Minister said. In Civil Aviation sector, un-served and underserved airstrips are to be revived by Airport Authority of India and also in partnership with State Governments. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


– AGRICULTURE, FISHING and RURAL DEVELOPMENT


6. Budget 2016-17 presented in Parliament; major focus on agriculture and farmers' welfare 28.5 lakh Hectares to be brought under irrigation 
Press Information Bureau | Mar. 01, 2016 

New Delhi: Major focus on agriculture and farmers’ welfare, massive mission to provide LPG connection to poor households, a new health protection scheme, increased outlay for infrastructure, Rs. 2.87 Lakh crore Grant in Aid to Gram Panchayats and Municipalities, setting up of 1500 Multi Skill Training Institutes and incentives for jobs creation are major highlights of the General Budget 2016-17 presented in Lok Sabha today by Union Finance Minister Sh. Arun Jaitley. Announcing a number of new schemes and increasing the allocation in various sectors Sh. Jaitley underlined that the Government is firm on its course towards fiscal consolidation without compromising on its development agenda. He said 3.5% fiscal deficit is targeted for FY 2016- 17. 

Stating that the IMF has hailed India as a ‘bright spot’ amidst a slowing global economy, the Finance Minister said the growth of GDP has now accelerated to 7.6% compared to the last three years of the previous Government when growth had decelerated to 6.3% . He said this was accomplished despite two consecutive years of monsoon shortfall of 13% compared to normal rainfall in the last three years of the previous Government. He added that the country’s external situation is robust and the Current Account deficit has declined from 18.4% billion US dollars in the first half of last year to 14.4 billion this year. 

While cautioning about the risks of further global slowdown and mounting turbulence, he said this complicates the task of economic management for India. He said the financial years 2015-16 and 2016-17 have been and will be extremely challenging for Government expenditure. He said the next financial year will cast an additional burden on account of the recommendations of the 7th Central Pay Commission and the implementation of Defence OROP. Stating that the Government has to prioritise its expenditure, Sh. Jaitley said the Government wants to enhance expenditure in the farm and rural sector, the social sector, the infrastructure sector and provide for recapitalisation of the banks. 

The Finance Minister said that the Government will undertake three major schemes to help the weaker sections. He said the Pradhan Mantri Fasal Bima Yojana has already been announced. The farmer will pay a nominal amount of insurance premium and get the highest ever compensation in the event of any loss suffered. Sh. Jaitley announced a health insurance scheme which will protect one-third of India’s population against hospitalization expenditure. He also announced that the Government is launching a new initiative to ensure that the BPL families are provided with a cooking gas connection, supported by a Government subsidy. 

Shri Jaitley said the Government will undertake significant reforms such as the enactment of a law to ensure that all Government benefits are conferred upon persons who deserve it, by giving a statutory backing to the AADHAR platform. He added that significant changes will be brought in the legislative framework relating to the transport sector so as to free it from constraints and restrictions. Other important reforms, the Finance Minister announced included incentivizing gas discovery and exploration by providing calibrated marketing freedom; enactment of a comprehensive law to deal with resolution of financial firms; providing legal framework for dispute resolution in PPP projects and public utility contracts; undertaking important banking sector reforms and public listing of general insurance companies and undertaking significant changes in FDI policy. 

The Finance Minister said the agenda for the next year will be to ‘Transform India’ in this direction. He highlighted that the budget proposals are built on this transformative agenda with nine distinct pillars which include: Agriculture and Farmers’ Welfare; Rural Sector; Social Sector including Healthcare; Education, Skills and Job Creation; Infrastructure and Investment; Financial Sector Reforms; Governance and Ease of Doing Business; Fiscal Discipline and Tax Reforms. 
Sh. Jaitley announced that the Government will reorient its interventions in the farm and non-farm sectors to double the income of the farmers by 2022. He said total allocation for Agriculture and farmers’ Welfare is Rs. 35,984 crore. Stating that the ‘Pradhan Mantri Krishi Sinchai Yojana’ has been strengthened and will be implemented in mission mode, he said 28.5 lakh hectares will be brought under irrigation under this Scheme. He also underlined that the implementation of 89 irrigation projects under AIBP, which have been languishing will be fast tracked. 

The Finance Minister announced creation of a dedicated Long Term Irrigation Fund in NABARD with an initial corpus of about Rs. 20,000 crore. To achieve all these, a total provision of Rs. 12,517 crore has been made through budgetary support and market borrowings in 2016-17. He also said, simultaneously a major programme for sustainable management of ground water resources has been prepared with an estimated cost of Rs. 6,000 crore and proposed for multilateral funding. The Minister said at least 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up by making use of allocations under MGNREGA. 

Sh. Jaitley said the Soil Health Card Scheme will cover all 14 crore farm holdings by March 2017. He said 2,000 model retail outlets of fertilizer companies will be provided with soil and seed testing facilities during the next three years. 
The Finance Minister announced that the allocation under Pradhan Mantri Gram Sadak Yojana has been increased to Rs. 19,000 crore and it will connect remaining 65,000 eligible habitations by 2019. 
In the budget special focus has been given to ensure adequate and timely flow of credit to the farmers. Against the target of Rs. 8.5 lakh crore in 2015-16, the target for agricultural credit in 2016-17 will be an alltime high of Rs. 9 lakh crore. To reduce the burden of loan repayment on farmers, a provision of Rs. 15,000 crore has been made in the BE 2016-17 towards interest subvention. 

The Finance Minister informed that for effective implementation of Prime Minister Fasal Bima Yojana, Rs. 5,500 crore have been provided in the Budget 2016-17. He said to make dairying more remunerative to the farmers, four new projects will be taken up: 
First the ‘Pashudhan Sanjivani’, an animal wellness programme and provision of Animal Health Cards (‘Nakul Swasthya Patra’); 
Second, an Advanced breeding technology; 
Third, Creation of ‘E-Pashudhan Haat’, an e market portal for connecting breeders and farmers; and 
Fourth, a National Genomic Centre for indigenous breeds. These projects will be implemented at a cost of Rs. 850 crores over the next few years. 

Regarding rural sector, Sh. Jaitley announced that a sum of Rs. 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities. It will translate to an average assistance of over Rs. 80 lakh per Gram Panchayat and over Rs. 21 crore per Urban Local Body. 

Sh. Jaitley said every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission. He announced allocation of Rs. 38,500 crore for MGNREGS. He said 300 Rurban Clusters will be developed under the Shyama Prasad Mukherjee Rurban Mission. He declared that the Government is committed to 100% village electrification by 1st May, 2018. Regarding Swachh Bharat Mission, Sh. Jaitley said Rs. 9,000 crore has been provided for it. He said a new Digital Literacy Mission Scheme for rural India will cover around 6 crore additional households within the next 3 years. In order to develop governance capabilities of Panchayati Raj Institutions on the Sustainable Development Goals, the Minister announced a new scheme namely ‘Rashtriya Gram Swaraj Abhiyan”, for which Rs. 655 crore is being set apart. For rural development as a whole, Rs. 87,765 crore have been allocated. 

The Finance Minister announced a massive mission to provide LPG connection in the name of women members of poor households for which Rs. 2000 crore have been earmarked. This will benefit about 1 crore 50 lakh households below the poverty line in 2016-17. The Scheme will be continued for at least two more years to cover a total of 5 crore BPL households. 
Sh. Jaitley also announced a new health protection scheme which will provide health cover up to Rs. One lakh per family for economically weak families. For senior citizens of age 60 years and above belonging to this category, an additional top-up package up to Rs. 30,000 will be provided. In order to make quality medicines available at affordable prices, 3000 stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17. He said that a ‘National Dialysis Services Programme’ will be started to provide dialysis services in all district hospitals. 

In the area of education, the Finance Minister said allocation under Sarva Shiksha Abhiyan will be increased. 62 new Navodaya Vidyalayas will be opened in the remaining uncovered districts over the next two years. In order to empower Higher Educational Institutions to help them become world class teaching and research institutions, an enabling regulatory architecture will be provided to ten public and ten private institutions to emerge as world-class Teaching and Research Institutions. The Finance Minister said that the Government has decided to set up a Higher Education Financing Agency (HEFA) with initial capital base of Rs. 1,000 crore. The Finance Minister while laying emphasis on skill development said the Government wants to bring entrepreneurship to the doorsteps of youth through Pradhan Mantri Kaushal Vikas Yojana (PMKVY). 1500 Multi Skill Training Institutes will be set up for which Rs. 1700 crore have been set aside. 

Shri Jaitley said that in order to incentivize creation of new jobs in the formal sector, the Government will pay the Employee Pension Scheme contribution of 8.33% for all new employees enrolling in EPFO for the first three years of their employment. This will incentivize the employers to recruit unemployed persons and also to bring into the books the informal employees. 

The Finance Minister laid special emphasis on Infrastructure and Investment. He said the process of road construction has speeded up. An allocation of Rs. 55,000 crore in the Budget for Roads and Highways has been proposed which will be further topped up by additional Rs. 15,000 crore to be raised by NHAI through bonds. The total investment in the road sector including PMGSY allocation would be 97,000 crore during 2016-17. He said together with the capital expenditure of the Railways, the total outlay on roads and railways will be Rs. 2,18,000 crore. He said 10,000 kms. of National Highways are expected to be approved in 2016- 17. He further said abolition of permit-raj will be the medium term goal. The Government will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment. Shri Jaitley said, an enabling eco-system will be provided for the States which will have the choice of adopting the new legal framework. 

In the port sector, the Finance Minister said the Sagarmala Project has already been rolled out. The Government is planning to develop new greenfield ports. The work on National Waterways is also being expedited. He said Rs. 800 crore has been provided for these initiatives. In the Civil Aviation Sector action plan is being drawn up to revive unserved and underserved airports. There are about 160 airports and air strips with the State Governments which can be revived at an indicative cost of Rs. 50 crore to Rs. 100 Crore each. 
In the power sector, he said the Government is drawing up a comprehensive plan, spanning next 15 to 20 years to augment the investment in nuclear power generation. 
To augment infrastructure spending further, the Government will permit mobilization of additional finances to the extent of Rs. 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority through raising of Bonds. 

The Minister announced reforms in FDI Policy in the areas of Insurance and Pension, Asset Reconstruction Companies, Stock Exchanges etc. He said 100% FDI will be allowed through FIPB route in marketing of food products produced and manufactured in India. The Minister said a new policy for management of Government investment in Public Sector Enterprises, including disinvestment and strategic sale has been approved. 

Shri Jaitley announced a number of financial sector reforms. A comprehensive Code on Resolution of Financial Firms will be introduced as a Bill in the Parliament during 2016-17. He said the RBI Act 1934 is being amended to provide statutory basis for a Monetary Policy Framework and a Monetary Policy Committee through the Finance Bill 2016. A Financial Data Management Centre will also be set up. Expressing concern over problem of stressed assets in Public Sector Banks, the Minister said several steps have been taken in this regard. He said to support the banks, an allocation of Rs. 25,000 crore is being proposed towards recapitalization of Public Sector Banks. 

Stating that the Government is giving unparalleled emphasis to good governance, Shri Jaitley said a task force has been constituted for rationalization of human resources in various Ministries. He added a comprehensive review and rationalization of autonomous bodies is also underway. The Minister said a bill will be introduced for Targeted Delivery of Financial and Other Subsidies Benefits and Services by using the Aadhar framework. He said it is proposed to introduce DBT on pilot basis for fertilizer in a few districts across the country. The Minister said automation facilities will be provided in 3 lakh Fair Price Shops by March 2017.

Shri Jaitley announced that “Ek Bharat Shreshtha Bharat” programme will be launched to link States and Districts in an annual programme that connects people through exchanges in areas of language, trade, culture, travel and tourism. 

On the fiscal situation in the country the Minister said the prudence lies in adhering to the fiscal targets. Consequently, he said, the fiscal deficit in RE 2015-16 and BE 2016-17 have been retained at 3.9% and 3.5% of GDP respectively. He added a redeeming feature of this year’s Budget is that the Revenue Deficit target has been improved upon from 2.8% to 2.5% of GDP in RE 2015-16. 
The total expenditure in the Budget for 2016-17 has been projected at Rs. 19.78 lakh crore, consisting of Rs. 5.50 lakh crore under Plan and Rs. 14.28 lakh crore under Non-Plan. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


7. PM unveils operational guidelines for Pradhan Mantri Fasal Bima Yojana and announces National Agricultural Market for farmers 
Press Information Bureau | Feb. 19, 2016 

New Delhi: The Prime Minister, Shri Narendra Modi, today unveiled the operational guidelines for the Pradhan Mantri Fasal Bima Yojana at a massive farmers' rally in Sehore in Madhya Pradesh. 
Explaining the benefits of this comprehensive crop insurance scheme to the farmers, the Prime Minister said it can provide a solution for the farmers problems, in times of difficulty. He said care had been taken to eliminate the shortcomings of previous crop insurance schemes, and create trust among farmers with regard to crop insurance. He said technology would be used extensively with this scheme to ensure early settlement of claims, and exhorted farmers to take benefit of this scheme. 

The Prime Minister outlined several other initiatives that have been taken by the Union Government for the welfare of farmers. He mentioned the steps taken to clear the pending dues of the sugarcane farmers, which had mounted to many thousands of crore rupees. 

Speaking about the Digital India movement, the Prime Minister said welfare of the farmers is at the core of this initiative. He announced the launch of the digital platform - National Agriculture Market – from the 14th of April, 2016, on the birth anniversary of Babasaheb Ambedkar. This would enable farmers to get a better price for their produce. 

The Prime Minister also mentioned other major initiatives taken in the agriculture sector, such as the soil health card scheme, the Pradhan Mantri Krishi Sinchai Yojana, organic farming, and ensuring adequate availability of urea. 

Shri Narendra Modi congratulated the farmers of Madhya Pradesh, and the Chief Minister of Madhya Pradesh, Shri Shivraj Singh Chauhan, for the State's excellent performance in the agriculture sector. 
The Prime Minister also gave away soil health cards, and settlement certificates for insurance claims to select beneficiaries. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


8. 100 per cent FDI In multi brand marketing of food to act as catalyst for the food processing sector - Ms Harsimrat Kaur Badal 
Press Information Bureau | Mar. 08, 2016 

New Delhi: Food Processing Minister Smt. Harsimrat Kaur Badal has said that the decision to allow 100 percent FDI in multi brand marketing to food grown and processed in India will act as a catalyst for the food processing sector in India. The Food Processing Minister was speaking during the seminar on ‘Re-energizing the Agri Business: Untapped Potential of Haryana’ as part of the Global Investors Summit-2016 at Gurgaon today. 

She said that presently around 10 percent of foodgrains is processed in developed countries its percentage is much higher. She expressed the hope that allowing 100 percent FDI in multi brand retail with 100 percent local sourcing condition will enable greater foreign direct investment that will result in a faster growth for the sector. The Minister said that the NDA government has taken several initiatives to improve the condition of farmers such as the schemes relating to Fasal Bima Yojana, Har Khet Ko Paani, Per Drop More Crop, Organic Farming, E-platform for Mandis. The Minister said that presently the level of food wastage is very high and it is estimated that around Rs.92,000 crore of foodgrains gets wasted. Food processing will help in reducing this food wastage and will also contribute to controlling inflation, uplifting the condition of farmers and creating more jobs. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


9. India ranks first in milk production, accounting for 18.5 per cent of world production 
Press Information Bureau | Feb. 29, 2016 

India recording a growth of 6.26 %, whereas world milk production increases by 3.1 %. Per capita availability of milk in India has increased from 176 grams per day in 1990-91 to 322 grams per day by 2014-15. Egg and fish production has also registered an increasing trend over the years. Production of fish during the last quarters of 2015-16 has also shown an increasing trend and is estimated at 4.79 MT 

New Delhi: The Economic Survey 2015-16 presented today in the Parliament by the Union Finance Minister Shri Arun Jaitley emphasizes that the Indian agricultural system is predominantly a mixed crop-livestock farming system, with the livestock segment supplementing farm incomes by providing employment, draught animals and manure. India ranks first in milk production, accounting for 18.5 per cent of world production, achieving an annual output of 146.3 million tones during 2014-15 as compared to 137.69 million tonnes during 2013-14 recording a growth of 6.26 per cent. Whereas, the Food and Agriculture Organization (FAO) has reported a 3.1 per cent increase in world milk production from 765 million tones in 2013 to 789 million tones in 2014. 

The per capita availability of milk in India has increased from 176 grams per day in 1990-91 to 322 grams per day by 2014-15. It is more than the world average of 294 grams per day during 2013. This represents a sustained growth in availability of milk and milk products for the growing population dairying has become an important secondary source of income for millions of rural households engaged in agriculture. 

The success of the dairy industry has resulted from the integrated co-operative system of milk collection, transportation, processing and distribution, conversion of the same to milk powder and products, to minimize seasonal impact on suppliers and buyers, retail distribution of milk and milk products, sharing of profits with the farmer, which are ploughed back to enhance productivity and needs to be emulated by other farm produce/producers. 

In the poultry segment, the Government’s focus, besides framing suitable policies for enhancing commercial poultry production, is for strengthening the family poultry system, which addresses livelihood issues. Both egg and fish production has also registered an increasing trend over the years. Egg production was around 78.48 billion eggs in 2014-15 while poultry meat production was estimated at 3.04 MT. Fisheries constitute about 1 per cent of the GDP of the country and 5.08 per cent of agriculture GDP. The total fish production during 2014- 15 was 10.16 MT, an production during the last quarters of 2015-16 has also shown an increasing trend and is estimated at 4.79 MT (provisional). There is increasing significance of poultry and livestock products in the context of diversifying farm and non-farm activities in the agriculture sector to increase livelihood security. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


10. Solar energy parks gain momentum in India">
10. Solar energy parks gain momentum in India 
Business Standard | Mar. 16, 2016 

New Delhi: The government’s aim of 100,000 Mw solar power generation by 2022 hinges on the success of 33 solar energy parks with 19,900 Mw capacity being planned across 21 states. 
Till recently, the upcoming 750 Mw park at Rewa in Madhya Pradesh was being touted as the biggest in the world. Now, say officials, Karnataka would have the biggest one, with 2,000 Mw capacity being planned at Pavagada in Tumakuru (earlier Tumkur) district. Some 3,000 Mw of solar park capacity has been implemented or is in the process of being tendered. 

The term describes an area earmarked for development of solar power generation projects. It is generally expected to offer 500 Mw and above in capacity; officials said hilly states have been allowed to set up smaller parks, since getting contiguous land is a problem there. 
“The solar park is a novel concept out of India. It can be replicated elsewhere through the International Solar Alliance,” said Ashvini Kumar, managing director, Solar Energy Corporation of India (SECI). It is the Union government’s nodal agency for developing this form of energy. 

He says these are being set up under four models. One, the state government declares a designated agency for implementation. Two, a project is done in a joint venture with SECI. Three, implemented entirely by SECI. Four, states join hands with private developers. 
SECI is involved with five of 33 solar parks, including the one coming up at Rewa. Maharashtra has two being implemented by private companies, KP Power and Pragat Akshay Urja. The Rajasthan government has decided on a tie-up with IL&FS Energy for development of 5,000 Mw of parks through an equal joint venture. The first one is being implemented at Badla in Jodhpur district, for a capacity of 1,000 Mw. The JV has signed a lease agreement with the state for 2,400 hectares of government land. Connectivity approval to the grid has come from Rajasthan Raj Vidyut Prasaran Nigam for 500 Mw and Power Grid Corporation of India for 500 Mw. 

“All long lead contracts are under finalisation. The company is in advanced discussion with many customers for development of power projects in the solar park. It would enable generation of 500 Mw by March 31, 2017, and a further 500 Mw by December 31, 2017,” said Sunil Wadhwa, chief executive officer, IL&FS Energy, Based on progress achieved in the first park, the JV would develop other parks in Rajasthan over the next four to five years, he said. The company is also in discussion with some other states to develop solar parks in multiples of 500 Mw capacity. 

Solar parks help in advance action on two key enablers for solar power development -- land and power evacuation. Once these risk factors are taken care, what remains for project development and commissioning is more manageable. “These are clearly the long lead items and putting these in place means project developers are able to move from investment to power generation in six to nine months, as compared to around 15 months for standalone projects and with uncertainties related to land acquisition. The results are visible in the low tariffs (rates) recently bid for such projects to be set up in solar parks in Andhra Pradesh and Rajasthan,” said Wadhwa. 

Under the solar park policy, land is provided by the state governments. Around 5 acres are required for one megawatt capacity, so Kumar said around 1 lakh acres would be required for the 33 solar parks all together. “If land is assured, the transmission network can be developed fast. Power is evacuated by state agencies,” said Kumar. Besides, wheeling charges for a line transmitting power till the central transmission line is not levied. The land cost in solar parks, however, is higher than elsewhere, as project operators are offered developed infrastructure. Analysts fear this could lead to increase in final tariffs. 

The Union government is giving developers Rs 2 lakh for every Mw capacity as viability gap funding if being developed under the solar park policy. The developer recovers the remaining cost from project operators. The Union government provides the guidelines for development, sets benchmarks and provides incentives. The ministry of new and renewable energy handles the other key area of coordination required for power evacuation, where Power Grid Corporation has been required to play a lead role in grid connectivity, said Wadhwa. Kumar said states want more parks to be developed and the Centre might look at expanding the programme. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


– INDUSTRY, MANUFACTURE


11.1. Make in India week ends with Rs 15.2 trillion ($221 bn) of investment commitments 
Livemint | Feb. 19, 2016 

Mumbai: The Make in India week in Mumbai, which concluded on Thursday, has resulted in investment commitments worth Rs.15.2 trillion across various Indian states, Amitabh Kant, secretary, department of industrial policy and promotion (DIPP), told reporters. 
Of this, about 30% of the investments fall under the foreign direct investment (FDI) category, he said, adding that these commitments are those that the DIPP and other government agencies have been able to collect information about. “There may be more investment that has been committed but which we have not been able to get information on,” he said. 

Maharashtra, which hosted the Make in India week, has bagged more than half this investment commitment. Chief minister Devendra Fadnavis said the state has signed 2,594 memoranda of understanding (MoUs) worth over Rs.8 trillion. These MoUs would create more than 3 million jobs in Maharashtra. Fadnavis said the investment was spread across the state and that the Vidarbha, Marathwada and Khandesh regions had a share of Rs.1.75 trillion. 

“The spectrum of these investment proposals is so large that it covers sectors from real estate to tourism to skill development to agro food processing to animal husbandry. I am sure these investments, and the regions where the investors are putting their money, will open up more sectors and spur more investment,” Fadnavis said. 
Asked about the rate of investment implementation, Fadnavis said the state had entered into these MoUs after a rigorous process of vetting. 
“Each of these MoUs has been vetted by us and we will make every effort to translate them into reality. The investments should not take more time than what is due,” he said. 

Kant, who will soon exit as DIPP secretary, said the investment commitments would typically take 18 months to three years to materialize, and called the Make in India event and programme a big success. “Since the prime minister launched this initiative, we have been able to create a sense of competition among states. We have promoted an investment-enabling environment and encouraged design, innovation and start-ups. The Make in India week offered a platform to investors, governments, countries, CEOs, consultants, diplomats and companies a common to come together and discuss business,” he said. 

The Make in India centre in Mumbai’s Bandra Kurla Complex registered more than 100,000 business enquiries from 13 to 18 February. The grounds where the event was held saw nearly 600,000 visitors, 150 events, 215 exhibitions, and 8245 business-to-business, business-to-government and government-togovernment meetings. 
Kant said that 20 countries were represented and 17 Indian states exhibited their investment credentials. More than 9,000 Indian companies and 2,000 foreign companies participated in the event, along with more than 1,000 CEOs. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


11.2. Make More in India': Why IKEA is beefing up its manufacturing ahead of its store launch 
ET Bureau | Feb. 8, 2015 | Malini Goyal

For IKEA, so far product development has largely been done in Sweden, inspired by Scandinavian designs. Opening up such new centres is an attempt to also diversify the product development process. "We want to take the flavours of a young and cool India to the world," says Wisbeck. Current sourcing from India at 315 million (3% of global supply) is expected to double by 2020 to 630 million. 
While in China IKEA's emphasis is on synthetic materials, in India it will be on local natural fibres. The company's engineers and product development team are experimenting with many new and old materials like jute, bamboo, coconut fibre besides acacia and cotton to design new products. 

For example, they are exploring if coconut fibre can be used as a material for furnishing items. Particle dust boards are popular in Scandinavian countries but are not easily available here. So IKEA will explore the possibility of developing jute based boards in India. 
For IKEA, beefing up the supplier base involves, besides roping in new ones, getting old suppliers to set up new capacities or diversify into new categories. Consider Delhi-based Neokraft, an auto component vendor that began supplying lighting products to IKEA way back in 2001. "Even though it was a new field for us, IKEA helped us cover the journey smoothly," says Rajesh Jain, Neokraft's managing director. 

In the past 10 years the firm's revenue have grown 20-fold and today has over 700 employees with IKEA as its biggest buyer. It is diversifying once again, this time into metal products. It also exports metal chair components to an IKEA supplier in the US. IKEA is nudging them to set up a green field project near a port to prop up exports. On the back of IKEA's orders, Neokraft is hoping to double revenues by 2018.

Suppliers on an Expansion Spree 
Karur-based Asian Fabricx, which produces rugs, bedsheets and other home furnishing products for IKEA, now even produces the yarn in-house. "They encouraged and helped us to backward integrate. It helps us control costs and quality," says V Ashok Ram Kumar, managing director, Asian Fabricx. The company is now diversifying into making upholstery and sofas for IKEA. 

Arjun Nath, MD, Associated Lighting Company, a Noida-based lighting company, says they are discussing at least three to four greenfield projects with IKEA. One is for a diversification into metal and composite (like wood and metal combined) furniture. 
Nath says last year the lighting business at IKEA opted for global benchmarking. "India emerged as the most competitive place to source lighting products for IKEA," says Nath. 
Since then, business volumes have doubled. "Who says India cannot be more competitive than China. Make in India is a tremendous opportunity for us," says Nath. Some big suppliers like the $3.5-billion (Rs 21,600 crore) Welspun Group and Rs 6000-crore Trident Group too are stepping up the pace. Welspun, which also supplies to big retailers like Target, Walmart and Macy's, first began working with IKEA in 2003 but stopped supplying by 2006. 

"We just could not sustain IKEA's high volumes," recalls Dipali Goenka, managing director, Welspun Global Brands. Welspun restarted working with IKEA around 2008. From supplying just bath rugs, the company now provides other kinds of rugs and a range of bedsheets. 



Global Lessons 
IKEA's supplier strategy in India will benefit from its rich global experience. "IKEA today has perhaps the most developed supplier network [in the world]," says Pervez N Ghauri, professor (international business), King's College, London, who has written multiple research papers on IKEA's supplier network. 
Unlike most retailers, IKEA buys production capacity rather than product quantities. It signs long term contracts with suppliers and works closely with them to share best practices, technology, build scale, efficiency and profitability. As a rule, its best-selling products are manufactured by more than one supplier. 
But the MNC also optimises production volumes in its orders to achieve scale and low prices. It helps that the bulk of the IKEA range is the same all over the world, so large volumes can be ordered. Often the retailer plays a critical role in purchase of raw materials by its suppliers. At times it offers financial support, helping suppliers invest in machinery, technology and the like. 


12.1. Honda starts world's largest scooter plant in Gujarat 
Business Standard | Feb.18, 2016 

New Delhi: Gujarat is now home to the world's largest scooter manufacturing site, as Japanese two-wheeler giant Honda Motorcycle and Scooter India (HMSI) started its fourth plant in India at Vithalapur, a scooters’- only facility, just 15 km from Suzuki Motor Corporation's upcoming facility in Gujarat. 

Spread over 250 acres, the facility has come up in just 13 months with an investment of nearly Rs 1,100 crore. Initially, the plant would produce around 600,000 scooters per annum which would be scaled up to 1.2 million scooters per annum by mid 2016. With the Gujarat plant commencing full production, HMSI's net installed capacity in India would be scaled up to 5.8 million units per annum in 2016 from 4.6 million units at present. Around 22 vendors of HMSI have set up shop in the vicinity of Vithalapur and in Sanand (about 40 km from here), and have cumulatively invested around Rs 1,100 crore in Gujarat. 

HMSI claimed that its fourth plant in India has created job opportunities for 3,000 people (directly and indirectly). About 85 per cent of the operators on the shop floor are local, while about 50 per cent of the managerial staff are from Gujarat. 
Inaugurating the facility here, the company said that it was all set to take the two-wheeler market by storm with its all new 'fun-bike' Navi that would hit the Indian roads by April this year. It would, however, be made at its Tapukara plant in Rajasthan and would sport the 110-cc Activa HET engine. 

After running full capacity at its three existing plants in India last year, the fourth plant is expected to give HMSI the much-needed volume boost required to clear its current order backlog of 30,000 scooters till January. 
Explaining the increasing 'scooterisation' of the Indian as well as the Asian markets, YS Guleria, senior vice president, sales and marketing, HMSI said, automatic scooters now contribute nearly 30 per cent of the twowheeler market in India, and in the next five years, we see this share going up to 35 per cent. 
"Between April 2015 to January 2016 while the overall two-wheeler market in India has declined by 1 per cent, motorcycles have registered a sales decline of 2 per cent, while scooters have registered a growth of 12 per cent," Guleria said. 

As such nearly 65 per cent of HMSI's sales in India come from scooters and Keita Muramatsu, president and CEO of HMSI, claimed that India contributes roughly about 25 per cent of HMSI's global sales of 17.5 million two-wheelers. As per data from the Society of Indian Automotive Manufacturers (SIAM), HMSI has sold 3.5 million two-wheelers during April to January 2015-16. 

Gujarat roughly accounts for nearly 10 per cent of HMSI's sales and is a key market for the company, and nearly 40 per cent of all two wheelers sold in Gujarat are scooters. 
Speaking on the occasion, Gujarat chief minister Anandiben Patel said that as a member of legislative assembly from Mandal in 1998, she had seen this zone languish without proper infrastructure, roads and even agriculture. "With these companies setting up plants here, it has brought about a huge difference to the area. I saw several young ITI pass outs working at the site during my plant visit," she said adding that the state government has urged companies to adopt Industrial Training Institutes (ITIs) to develop industry-ready youth. 

Cumulatively HMSI has invested Rs 6,000 crore in its Indian operations so far, and by the end of this fiscal the figure would touch Rs 7,400 crore as the fourth plant comes into operation. HMSI started production in India from 2001 (Manesar, Haryana). In 2011, the second plant came up at Tapukara, Rajasthan, followed by Narsapura facility in Karnataka in 2013, taking the total installed capacity to 4.6 million units pa.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


12.2. Ford, GM to operate India factories round the clock 
Times of India | Mar. 07, 2016 

Mumbai/New Delhi: Three global automobile powerhouses either have started operating their India factories round the clock or are in the process of doing so to meet increasing export demand, in a resounding endorsement of the Prime Minister's call to make in India. 
For the past six months, Ford Motor's manufacturing facility in Tamil Nadu is running three shifts a day, which is uncommon in the American carmaker's global operations. 
Europe's largest carmaker, Volkswagen, is set to start a third shift starting next week, while the US No. 1, General Motors, is expected to add another shift from the beginning of next year. 

Interestingly, these companies aren't doing so well in the Indian market, and the incremental output is to cater to markets in Latin America, Europe and Africa. 
ET spoke to several vendors who supply parts to these carmakers and they said while the domestic market is expected to grow by a single digit, the likes of Ford India, General Motors India and Volkswagen India are targeting 20-60% jump in 2016 production, clearly indicating their export plans. While these carmakers have a market share of less than 3-4% in India, experts say high export volume is helping them make local operations viable. 

Automakers have committed to invest billions of dollars in India, enticed by the local market opportunity in the long term as well as its frugal manufacturing capabilities and abundant skilled manpower, which offer a cost-effective environment to make small cars and sell them at competitive prices internationally. 
In fact, even before Narendra Modi made the call to make in India a year and half ago, making in India for the world had already become part of global carmakers' strategy and boardroom discussions. Hyundai Motor and Maruti Suzuki have long been shipping India-made cars to foreign markets, even as they ruled the domestic market as well. Companies such as Nissan and Renault, too, target foreign markets with compact vehicles produced in India. 

But now, with the government's new push to promote manufacturing in India, companies are further expanding production and exporting more, even though the domestic market remains stuck in the slow lane. "We are committed to position India as a global centre of excellence for manufacturing small cars and low displacement engines," said a spokesperson for Ford India, which is churning out the EcoSport compact SUV for the global markets from its plant near Chennai. 
"Our unflinching commitment to India is reflected in the aggressive implementation of our growth plans, including more than $2 billion we have invested here so far," he said. 

Volkswagen and GM are witnessing strong demand for their India-made cars in Mexico - for the Vento and Beat, respectively. The Vento is already the segment leader in the Latin American country, where it sells double the number compared with India. 
Volkswagen India Managing Director Andreas Lauermann said going past the capacity of the two-shift system due to higher demand is an important milestone for the company. 
"Volkswagen Pune plant will start off with the third shift soon and will ramp up the production over the year. This step is necessary due to the rising demand from exports as well as domestic market, especially through the new Ameo. Exports have helped VW to create a natural hedging against the weak Indian rupee and fluctuating domestic demand," Lauermann said. 

Volkswagen India sees exports contributing equally with domestic sales to its total production in the coming few years. 
GM, as part of global manufacturing realignment, has given responsibility to India to focus on growth markets. "India will focus mostly on growth markets, as part of GM's global growth strategy and Korea will focus mostly on mature markets," said the company spokeswoman. 
The Ford India spokesperson said, with the recently inaugurated manufacturing facility at Sanand in Gujarat and the Chennai factory, the company is well on course to triple its exports from India and sell made-in-India products in nearly 50 markets over next five years. 

With demands of Indian customers also aligning to global markets, it is becoming easier for carmakers to serve global markets of Europe and other developed markets out of India. 
The quality of cars produced out of India has also improved to such a level that Maruti Suzuki will be exporting India made Baleno hatchback to Japan and Ford will be shipping the EcoSport to North America starting 2017. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


13.1. Cipla completes $550 mn acquisition of two US firms 
PTI, Hindu | Feb. 18, 2016 

Pharmaceutical firm Cipla today announced that its UK arm, Cipla (EU) has closed the USD 550 million deal to acquire two US-based firms, InvaGen Pharmaceuticals and Exelan Pharmaceuticals. 
The acquisition was made by Cipla (EU) through a wholly-owned special purpose vehicle which would merge into InvaGen Pharmaceuticals after the acquisition, Cipla said in a BSE filing. 

In September the company had announced that it would acquire the two US-based companies owned by one of the promoters of Hetero Group in an all cash transaction of USD 550 million (approx Rs. 3,650 crore). Cipla Global Chief Operating Officer Umang Vohra said, “The acquisition will further strengthen Cipla’s presence in the US pharmaceutical market. InvaGen’s balanced portfolio, robust manufacturing base and strong R&D capabilities will act as lever to expand Cipla’s reach in the US market.” 

The company said the acquisition will give scale to its US business, currently 8 per cent of total revenue as well as providing a launchpad to introduce Cipla’s pipeline of products in respiratory and injectables, among others, in the coming years. 

The acquisition is second major buyout by Cipla in its 80 year history after the takeover of Cipla Medpro, South Africa. 
Cipla said the combined revenue for the two US-based firms for the year-ended 2015 is over USD 230 million. Combined with the pipeline of InvaGen products, the overall portfolio will be wide-ranging and will cover chronic therapies like CVS, CNS, respiratory, oncology and diabetes among others. 

The acquisition of InvaGen pharmaceuticals also provides Cipla with about 40 approved ANDAs, 32 marketed products, and 30 pipeline products which are expected to be approved over the next 4 years, the company said. 
In addition, InvaGen has filed five first-to-file products. Dosage forms include immediate release, modified release and extended release tablets and capsules. InvaGen has three units located in Long Island, NY, with a total production capacity of 12 billion tablets and capsules per annum and about 500 employees. 
With this acquisition, Cipla will have more relevance to wholesale and retail customers, the company added. Shares of Cipla were trading at Rs. 523.75 in the mid-day trade, up 0.78 per cent from the previous close on BSE. 


13.2. Lupin eyes buyouts in specialty product business 
Business Standard | Feb. 24, 2016 

Mumbai: Drug maker Lupin would not scale down its operations in emerging markets despite currency fluctuations and the company would look at acquisition opportunities in specialty product business for growth, its managing director Nilesh Gupta said here on Tuesday. 
Lupin, which acquired drug firm Medquimica in Brazil last year, is now expanding its business in Mexico as well. Rest of the world segment, which included business from Latin America and the Philippines, contributed 6.8 per cent of Lupin's revenue in the third quarter of FY16 and the segment saw a 36.8 per cent growth in revenue in the first nine months of FY16. South Africa contributed three per cent of the revenue in the third quarter and nine-month sales increased by 8.5 per cent. In 2014, Lupin entered into a strategic partnership with drug company Merck Serono to expand business in emerging markets. 

Gupta said Lupin would look at acquisitions of both products and companies in speciality product segment to achieve $5 billion turnover by 2018. 
Lupin's $850-million acquisition of US drug firm Gavis will be concluded in a few days and the deal is expected to boost the company's US business. In FY17, the firm expects double-digit growth from the US market. Lupin is also setting up a plant in Japan, which will be ready next year. It has commissioned a plant in Goa to cater to the Japanese market, Gupta added. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


14.1. Encourage large investments in the petrochemical sector: Supreme Ind MD Taparia 
Hindu | Feb. 21 2016 | Mitali Patel

Supreme Industries MD MP Taparia says India must build large-scale polymer units to meet rising domestic demand. 
The Budget bet this time hovers around higher public spending and reviving the investment cycle. While many sectors are plagued by excess capacity, the plastic industry is in dire need of capacity addition. 
Speaking to Bloomberg TV India, Supreme Industries Managing Director MP Taparia says India must build large-scale polymer units to meet rising domestic demand. Any growth model based on increasing import volume is unsustainable, he says. 

What’s your expectation from the Budget for the plastic industry? 
Plastic product makers are greatly encouraged by the Prime Minister’s clarion call of ‘Make in India’. We expect policy measures in the Budget on four lines. One, the surge of plastic product imports is hurting the country and industry in a big way: such imports are substantially under-invoiced, and erodes the competitive edge of local producers, apart from the huge revenue leakage. We expect the Budget to announce suitable mechanism to cut legal smuggling. 

Secondly, the industry has huge potential for global plastic trade. In 2015, China exported $103 billion of plastic products, whereas India exported less than $4.5 billion. Even South Korea’s plastic exports are more than $15 billion. The industry believes current policy measures are inadequate to boost exports significantly.

 Plastic products manufacturing is labour intensive. Unless suitable policy measures are in place to encourage setting up of large units employing thousands of workers close to sea ports, this potential will remain untapped. Such policy direction will not only create large number of jobs but will also boost exports. Thirdly, the consumption of plastic raw materials is now growing at a pace in excess of 1.5 million tonne annually. To sustain such growth, large-scale polymer making capacity is required to be set up. No major capacity is coming up beyond 2017. Such capacity requires 4-5 years to fructify. Firm policy measures are required for boosting investment in large polymer making capacity. Otherwise industry will become completely dependent on imports for sustaining growth. Any growth based only on increasing import volume is unsustainable. 

What steps do you seek from the government? 
The government has to encourage large investment for petrochemical plants in India. Otherwise, the growth will be only dependent on the import of plastic raw material. And with fall in global oil prices, it will be profitable to set up such large plants. But the government has to come up with policy measures to boost local production. 


14.2. Electronics manufacturing gets a boost with ₹700-crore venture capital funding 
Hindu | 15 Mar. 2016 | Varun Aggarwal

Mumbai, India took the first step towards self-reliance in electronics manufacturing with a venture capital firm all set to invest ₹700 crore in a chip-making facility. 
Mumbai-based Next Orbit Ventures — formed to invest in semiconductor projects — will soon invest in one of the two consortiums interested in setting up massive chip-manufacturing facilities in the country. 
“We would be investing ₹700 crore in one of the two fabrication units immediately. Once the fabs receive a letter of commitment from the government, we’ll invest more,” Ajay Jalan, Managing Partner at Next Orbit Ventures, told BusinessLine. Fabs are facilities where semiconductor devices are manufactured. 

“We intend to invest in the first digital fab in Gujarat for a total project cost of $5.6 billion and the first analog fab for a total project cost of $1 billion,” Jalan said. The cost of developing analog semiconductors is lower than that for digital semiconductors. The formal contract signing is expected to take place before the month end. 
The investment would be a part of the $750 million electronics fund that Next Orbit Ventures launched recently. Jalan said the firm will invest up to $400 million from the fund in the fabs, while the rest will be invested in electronics component manufacturing companies and electronic design firms. 

India relies heavily on electronics imports: in 2014-15, total import of electronics goods grew over 15 per cent to reach an estimated ₹2,25,600 crore over the previous fiscal. The consortia approved by the government to build the two semiconductor units include one led by Jaiprakash Associates, which partnered IBM and Tower Semiconductor of Israel; and another led by HSMC Technologies, which joined hands with ST 
Microelectronics and Silterra Malaysia. The overall investment required for the two fabs is expected to cross ₹70,000 crore. 

The groundbreaking for the two chip-manufacturing units has been delayed for the last four years for reasons ranging from government approvals to feasibility issues. However, with the first large investment coming in, the industry expects more investors to follow. 
The two proposed fabs were the biggest components of the Electronic and Semiconductor Policy rolled out in 2012. 

“In order to invest more, we expect the government to also infuse some funds into the project. The project is of national importance and it is surprising that the ₹10,000-crore Electronic Development Fund launched by the government recently has no plans to invest in the fabs, which are the biggest building blocks for the electronics manufacturing ecosystem,” Jalan said. 

15.1. Havells plans manufacturing unit near Bengaluru 
Livemint | Feb. 22, 2016 

Bengaluru: Consumer electrical products maker Havells India Ltd plans to set up a new manufacturing unit on the outskirts of Bengaluru at a cost of Rs.1,059 crore, chairman Anil Gupta said. 
Delhi-based Havells has eleven plants across seven locations, and its proposed plant on a 50-acre plot near Bengaluru would be its first outside north India. 
The plan comes at a time when consumer electrical companies are moving towards “smart products,” fusing advanced electronics into conventional appliances. 

Showcased at the recent ‘Elecrama-2016’, an exposition of companies in the electrical sector staged in Bengaluru, were products such as bulbs that can change colour or intensity, geysers and fans that can switch on and off at pre-programmed times and solar street lights—all taking instructions from a laptop of smartphone using the Internet. 
Conventional home electrical products such as switches or fans are on their way out, Gupta said in an interview on the sidelines of Elecrama-2016. 
Electrical firms are trying to replace their conventional product range with ones that can be pre-programmed, contribute to energy efficiency and connected using the solutions such as the Internet of Things (IoT), says Gupta. 

IoT is defined as a worldwide network of “things” that include identifiable devices, appliances, equipment, machinery of all forms and sizes with the intelligence to seamlessly connect, communicate and control or manage each other to perform a set of tasks with minimum intervention. 
Havell expects the next stage of growth to be powered by such products, leading it to the south of the country, especially Bengaluru, to tap the region’s engineering talent, said Gupta. 
“We need a lot of talent having software capabilities and understanding of the overall engineering capabilities to develop such smart products,” he said. 

Havells manufactures goods ranging from cables and lighting products to switches and motors, among others, for both domestic and industrial applications. The company earned Rs.8,000 crore of revenue in the fiscal year ended March 2015. 
Gupta says he wants to build the ‘smart’ vertical into a Rs.1,000 crore business in five years. “By 2017, we expect 5-10% of our overall revenue to come from this sector,” he said. 
The company has secured approval for the proposed plant near Bangalore from the Karnataka government’s single-window clearance agency, Gupta said. It has the potential to create 2,576 jobs. 

Gupta isn’t the only one who is betting on smart products. Almost 50% of regular attendees of the electrical expo returned this year with products based on solutions such as IoT (Internet Of Things) or renewable energy, according to Anil Chaudhry, managing director of Schneider Electric India, the €15.6 billion global power and control products giant. 
“Last year we increased the 15-20% of our conventional devices to connected devices,” he said. “We will see more and more connected, digitised products based on applications with IoT and cloud. It could be a smart home where you are able to control switches, lights, switches, opening and closing of doors all with a single console or a smartphone app,” he said. 

“Within the next two years, about 40-50% of (our) revenue will come from our smart solutions and services. It could be a smart city, smart grid, smart hospital applications... already we are getting about 15-20 % (from them),” he said. 

For consumers, there will be a price to pay. A ‘smart bulb’ displayed by Havells in the expo—a solar bulb that can change its colour or intensity based on a smartphone app—costs Rs.3,000. How economical it is for the domestic consumers to buy such products? 

It is a transition phase and the prices will come down, said Nikhil Das, co-founder of Promptec Renewable Energy Solutions Pvt Ltd, a startup that manufactures LED and solar lighting products. 
Havells acquired a majority stake in Promptec last April. “We are now able to scale up the production of goods that use our technology. So we expect to bring down the price (of the bulb mentioned above) by almost 50%” Das said. 

The smart products trend dovetails with the central government’s Smart Cities initiative. For instance, Schneider Electric, hit the expo with what it calls a “Smart Grid”. Like the name suggests, the product claims to automate, connect and save energy for a variety of sectors—from electrical distribution to water management to emergency service—that will go into the making of a smart city. 
“Over a period of time, we expect the government will be investing a huge amount of money on such products. The companies who will be equipped with the technology for such products will be in a better position to sell them for these cities,” Gupta said. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


15.2. Xiaomi's Barra says looking to step up manufacturing in India 
Livemint | Mar. 04, 2016 

New Delhi: Xiaomi Technology India Pvt. Ltd, the local unit of China’s biggest mobile phone maker, said on Thursday that the company is ramping up its manufacturing plans rapidly and that 75% of the phones it sells in India are already being made locally. 
In August, Xiaomi together with Taiwanese contract manufacturer Foxconn Technology Group started assembling phones locally in Chittoor district of Andhra Pradesh. 
“We are ramping up our manufacturing in India for our latest product Redmi Note 3 and this is our fourth ‘made in India’ product,” said Hugo Barra, vice-president Xiaomi. 

The company is setting up a manufacturing capacity of about 200,000 Redmi Note 3 in the first month. Xiaomi on Thursday launched Redmi Note 3 at a price of Rs.9,999. The company already makes Redmi 2 Prime, Redmi 2 and Redmi Note Prime in India. 
Though the company wants to increase its manufacturing in India and eventually export phones from India to other international markets, it said that touching a 100% local manufacturing number would not be economically viable. 

“It might not be economically viable to manufacture very high end products here but for high-volume products the intention is to have 100% manufacturing here in India,” added Barra. “We want to find the most economic way and manufacturing locally makes our supply chain much more efficient.” 
According to Barra, the company has managed to cut cost of production with its local manufacturing plant. He did not disclose the financial details. 

“It is cost efficient as it reduces our working capital costs… when we import phones there is a 4-5 weeks of lead time to order the goods is 4-5 weeks. Manufacturing locally brings it down to two weeks. Also, there are tax benefits provided by the states,” said Manu Jain, India operations head at Xiaomi. 
To be sure, most handset manufacturers only assemble the phones locally instead of complete manufacturing because of lack of component makers in the country. 
However, according to Jain the company is seeing a lot of interest from component makers to set up their facilities in India. “we are already meeting a lot of component makers, who are keen to set up their shop in India,” said Jain. “…our core belief is that over a period of time, a large number of component makers will set up plants in India and we will go beyond just assembly.” 

Jain refused to disclose the name of component makers eyeing India. 
Xiaomi, which counts India as its second largest market after China, is known for offering smartphones at competitive prices by selling directly to consumers via online marketplaces with minimal marketing spending. On concerns over Xiaomi’s unsustainable valuation and slower growth in global markets, Barra said, “Our market valuation is what we raised our last round at and if we were to raise more money today which we don’t need to… but I can guarantee you that we will raise at a higher valuation than that the last one.” “
When you are growing at the speed of startup… you cannot expect the growth to be same on a percentage basis. It is impossible,” he added. 

The company claims to be growing at 40-45% on an annualised basis in India. Barra also said that there were no plans of an initial public offering in the foreseeable future as the company is profitable and has sufficient money to fund inorganic growth. 
“Last year, we raised about $1.1 billion as an investment horsepower, which means we wanted to have more money to invest in other companies (for instance content companies), rather than funding operations because they remain profitable. We closed 2015 as our second year of being number one in China and we continue to grow in India where we are in top three online brands.” 
The company continues to grow its product line and claims to be a market leader in television in China. Xiaomi is expected to launch its televisions and air purifiers in India this year. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


15.3. OnePlus partners Foxconn to start manufacturing in India 
Business Standard | Mar. 15, 2016 

Bengaluru: As it is looking at rapidly expanding into the Indian market, smartphone manufacturer OnePlus has partnered with contract manufacturer Foxconn to build its devices locally. 
The Chinese company is experimenting with its new OnePlus X smartphones before manufacturing its entire product range out of India. 
“We have a partnership with Foxconn for local manufacturing. We are going to have a deeper integration with them,” Pete Lau, founder and chief executive of the Shenzen-headquartered company told this newspaper. “Our goal is to have 90 per cent of the (OnePlus) devices sold in India be manufactured out of India by the end of 2017.” 

Unlike most other Chinese brands, OnePlus was incorporated in December 2014 with prime focus on global markets such as the US, Europe and India. The phones made a debut in India about 14 months earlier, through e-commerce major Amazon, its exclusive partner for the region. 
The company does not give sales data but the phones, mostly around Rs 20,000, have seen good acceptance among Indians who look at premium products at a mid-range price. 
“We are taking a step-by-step approach. Right now, we are taking our OnePlus X phones and doing testing for local manufacturing at the Foxconn facility. We have to ensure the quality of the product manufactured here remains intact,” said Lau. 

OnePlus has entered into a partnership with Foxconn wherein the latter would manufacture the former's phones at its facility in Sri City Integrated Business City, in Andhra. The facility would have a cumulative peak production capacity of 500,000 units a month, which could mean direct employment for at least 1,000 full-time workers, the company had earlier said. 
Lau said the company was also looking at introducing features unique to Indian users, whether content or integrated apps for online payment and e-commerce, to provide better user experience. OnePlus is looking at hiring a team of product managers in India who understand users’ habits. 

“We need to localise the products with the growing user base," he said. 
India, said Lau, had far exceeded the company’s expectations, despite the OnePlus phones addressing a premium segment. “When we first entered this market, people used to tell us ‘you can perhaps sell a couple of thousand devices, as the size of the market for Rs 20,000-plus products is very small. We far exceeded those numbers and expectations,” he said. “We are looking at long-term growth. We are looking at 10-plus years down the line, when the market for such phones would be much bigger than today.” 

According to various estimates, the mobile phone market in India is estimated to be around 100 million units a year. The segment OnePlus addresses is said to be around six per cent of the overall market or six mn units. Among its three major focused markets, India is the only region where the company sells its products in partnership with an e-commerce company. In America and Europe, it sells through its own e-commerce portal. "As a company, we have always strived to improve our operations by making us more efficient, so that we can pass on the savings to the consumers. For example, we save our margins because we don't sell offline. We also save on marketing because we don't do traditional way of marketing," Lau said. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


– SERVICES (IT, R&D, Tourism, Healthcare, etc.) 


16.1. R&D incentives will help auto companies 
Hindu | 21 Feb. 2016 | Vinod Dasari,

As Finance Minister Arun Jaitley prepares to present the Budget on February 29, India Inc. is looking forward to a systematic and structured pro-growth, pro-development direction. 
The recently concluded ‘Make in India’ week in Mumbai sparked a renewed sense of pride in the country’s manufacturing sector. It showcased the potential of design, innovation and sustainability across its manufacturing sectors in the coming decade. 
It has also made the direction and trajectory for growth and investment much clearer and should take corporate and government participation to the next level. 

Ashok Leyland and the automotive industry in general have the following expectations from this year’s Budget: 
• One legislation the entire industry is eagerly awaiting is the GST. This would be a game changer for the economy and provide strong impetus for growth. We hope the Budget charts out a clear implementation roadmap, which will enable companies to redesign internal systems/processes and adapt their supply chain logistics. 
• Specific incentives from the Finance Minister to support the initiatives of automotive companies in research and development will greatly aid efforts to build safer, greener and more fuel-efficient vehicles. This will ensure that we not only ‘Make in India’ but also ‘Design in India’. 
• We also hope that there is continued emphasis to drive investments, public and private, in infrastructure (especially roads and freight corridors). This will facilitate growth for the manufacturing and transportation sectors while also transforming national efficiency. 
• We expect the Budget to provide funding for public transport development in the recently-announced list of smart cities, with a focus on bus fleet enhancement and modernisation. 
• Another expectation is that the FM will take the first step towards lower corporate tax rates, as well as delayering of taxes, as outlined in the Budget speech last year. The writer is Managing Director, Ashok Leyland 


16.2. Lowe's sets up innovation lab in India 
Livemint | Feb.19, 2016 

Bengaluru: US-based home improvement chain Lowe’s Companies Inc. on Thursday launched its first innovation lab in the country in Bengaluru to operate a start-up accelerator that would help the retailer leverage the tech talent in the city. Globally, this is Lowe’s third innovation lab and the first one outside the US. Lowe’s is the third major US-based retailer after Target and Walmart seeking solutions developed by Indian start-ups. Target Corporation India has an accelerator programme too and graduated its third batch of startups in November. 

Lowe’s is looking for start-ups to partner with and mentor in a 16-week accelerator programme that is scheduled to start later this year. 
The other two Lowe’s innovation labs are in Seattle and North Carolina, where projects like Holoroom, an augmented innovation and virtual reality home improvement design tool and OSHbot, an autonomous retail service robot were developed, and later introduced in stores. 

The Bengaluru unit will focus on augmented and virtual reality, 3D printing and scanning, and robotics. The focus for the acceleration programme would be for start-ups to choose a problem area and develop a consumer facing solution with the help of Lowe’s team. 
“Lowe’s Innovation Labs-Bangalore will provide an open space where start-ups can interact and rapidly bring customer experience solutions to life through cutting-edge technologies, once thought to be the realm of science fiction,” said Kyle Nel, executive director of LIL, in a statement. “Bangalore is a dynamic community with world-class tech resources right in the heart of the city making it the perfect launching pad to expand our work in the US and take disruptive technology to the next level.” 

Lowe’s Innovation Labs employs science fiction writers, give them data on technology and people trends, and ask them to come up with probable stories on what might happen in the future. The teams then take stories, figure out an area which they could tackle, identify potential partners (start-ups) that could help them, and develop solutions based on these. 
Lowe’s has a Global In-house Center (GIC) in India since 2014 with more than 400 employees working on technology and analytics solutions. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


17.1. Airbus sees demand for 1,600 planes in India 
Business Standard | Mar. 18, 2016 

New Delhi: Indian carriers will require 1,610 aircraft over the next twenty years, European plane maker Airbus announced on Thursday in its India market forecast. This will include 1,230 single-aisle narrow body aircraft and more than 380 wide-body passenger and freight aircraft which continues to see significant demand. In its 2014 market forecast, Airbus had estimated India would require nearly 1,300 planes. 

“We have seen launch of new carriers in India and we see a role for A321neo, the largest single-aisle aircraft with lowest cost per seat. The number of wide-body planes in India will grow seven fold. We expect Indian carriers to increase international air traffic for which the airlines would need wide body planes. Indian carriers carry more than 30 per cent of India’s international traffic and there is room for it to grow to 50 per cent,” said Joost Van der Heijden, vice-president (marketing) of Airbus. 

The demand for wide bodies is also expected to increase as India relaxes the 5/20 rule. This would allow new airlines including AirAsia India and Vistara to fly abroad. 
Currently, Airbus has 210 aircrafts in India and an order backlog of more than 520 Airbus A320neo, giving it a market share of more than 70 per cent in service. On an average Airbus will deliver one aircraft each week over the next ten years. 

Air traffic in India is being driven by a strong seven per cent plus GDP growth and a rising middle class. "Traffic serving the Indian market is set to grow at 8.4 per cent year over the next twenty years, well above the world average of 4.6 per cent. Domestic Indian traffic will grow more quickly at 9.3 per cent - making India the world’s leading emerging aviation market," Airbus said. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


17.2. Grounded for 5 years, ‘Made in India’ plane awaits DGCA nod 
Hindu | Feb. 19, 2016 | Varun Aggarwal

One of the highlights at the recently concluded Make-in-India event was a locally manufactured six-seater aircraft. What’s surprising, however, is that the aircraft has not taken to the skies yet, having been grounded by bureaucratic hurdles that its creator has been fighting for the past five years. 
Amol Yadav, the brain behind the aircraft, has been working on building indigenous aircraft for the past 17 years. He finally succeeded in 2011 when he finished making the TAC 03 (named for the third attempt by his company, Thrust Aviation Company). 

The aircraft has a 350 horse-power engine, which is capable of reaching speeds of 192 knots (about 355 km per hour). It can reach an altitude of 13,000 feet and has a range of up to 1,200 km. The aircraft is also fitted with high-end navigation systems. 
But the aircraft has been gathering dust for the past five years since the DGCA (Directorate-General of Civil Aviation) is not even allowing Yadav to conduct test flights, leave alone start commercial operations. Yadav, a Mumbai-based pilot who works for Jet Airways, got lucky recently when he was introduced to Defence Minister Manohar Parrikar by a relative. 

“The Minister was quite impressed when he heard our story and our intention to build indigenous aircraft and hence save billions of dollars of foreign exchange for the country. But the DGCA has not even responded to our application in the last five years,” Yadav told BusinessLine. 
Parrikar seemed convinced enough that he roped in HAL and allowed Yadav to showcase his innovation at the Make-in-India event. 
“Mr Parrikar has shown interest in the project in his personal capacity but we haven’t seen any interest so far from the Defence Ministry. We are confident that we can make even fighter jets, if given a chance… As long as I’m fulfilling all the guidelines and following all the rules, why can’t I get clearance from the DGCA?” Yadav asks. 

The potential 
His six-seater aircraft cost him about ₹6 crore to build, with everything except the engine, navigation system and landing gear being built indigenously. “We are able to make this aircraft 40 per cent cheaper than a commercial aircraft with the same specifications. If we are allowed to go commercial, we can make it much cheaper,” Yadav said. 


18. Will refine Tata Motors, not reinvent it: CEO Butschek 
Hindu | Mar.17, 2016 | Rajesh Kurup,  

A month into his new job Tata Motors chief Guenter Butschek has completed a whirlwind tour of the company’s facilities, taken part in an employee offsite and interacted with dealers. The 55-year-old is expected to take tough decisions, including a reduction in the number of suppliers, at the country’s largest automobile maker. 
Butschek took charge as the automotive manufacturer’s Chief Executive Officer and Managing Director on February 15, a post that was lying vacant after the death of Karl Slym in 2014. The third expatriate to lead the company, after Carl-Peter Forster and Karl Slym, he also had meetings with Tata Group Chairman Emeritus Ratan Tata and Chairman Cyrus Mistry. 

“I was told to hold on to my passion and, of course to take the company to new heights,” Butschek said, referring to his meeting with Ratan Tata. 
Formerly with Airbus group as its Chief Operating Officer, Butschek is assigned to lead all operations of Tata Motors in India and international markets, including South Korea, Thailand, Indonesia and South Africa. In a select media roundtable, he opened up with the hope that the questions would be on Tata Motors and “less about me.” 
To be future-ready, the company will “undergo a major transformation process,” which would effectively review the entire setup, including structure, processes and manufacturing. The exercise would include brand repositioning, revamping products and expanding the global footprint. 
“We are not going to reinvent the brand Tata Motors, but we are going to refine it in order to make it a stronger statement,” Butschek said in his first interaction after taking charge. Butschek hopes to simplify the way Tata operates. “We need to be faster and much simpler in the way we are doing business; we need to take some of the complexities of our organisation out and need to create a much higher degree of agility.” For Tata Motors, supply-chain management would be a strong focus. 

Suppliers 
“We will certainly reduce the number of suppliers, because this is one of the few areas that make a statement that less is more. I would rather focus my energy and my resources on the development of my strategic supply partners instead of wasting on the ones who will always remain sub-standard.” 
He also plans to do bring in more accountability and achieve economies of scale, while improving quality. “We will do a holistic view, which would take a couple of weeks or months, but the end objective is more or less organisational efficiencies. The reference check is a number of key performance indicators, where I can objectively prove we have met our targets.” 
On Nano, he said it was a ground-breaking and visionary decision. “We are at cross roads and we need to think of game changers; Nano was a game changer, may be the next generation Nano would be the next game changer.” 


19. Extension of e-Tourist Visa scheme to 37 more countries 
Press Information Bureau | Feb 26, 2016 

New Delhi: The e-Tourist Visa (e-TV) facility will be extended to 37 more countries from tomorrow. The total count of countries under the scheme will become 150. 
The new 37 countries included in e-Tourist Visa scheme are Albania, Austria, Bosnia & Herzegovina, Botswana, Brunei, Bulgaria, Cape Verde, Comoros, Cote d'lvoire, Croatia, Czech Republic, Denmark, Eritrea, Gabon, Gambia, Ghana, Greece, Guinea, Iceland, Lesotho, Liberia, Madagascar, Malawi, Moldova, Namibia, Romania, San Marino, Senegal, Serbia, Slovakia, South Africa, Swaziland, Switzerland, Tajikistan, Trinidad & Tobago, Zambia and Zimbabwe. 

Government of India had launched the e-TV facility on November 27, 2014. Till now the scheme has been extended to 113 countries at sixteen Indian airports designated for providing e-Tourist visa service. Since the launch of the scheme more than 7.50 lakh Visas have been issued under the scheme. At present on an average 3,500 e-Tourist Visas are being granted daily to foreign nationals. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


20.1. Indian e-commerce market to grow fastest globally over 3 years: Morgan Stanley 
Economic Times | Feb. 18, 2016 

Bengaluru: India received $6.6 billion in venture capital and private equity investment in 2015, a 50% increase from the previous year, which probably contributed to a steep growth in the gross merchandise value for ecommerce companies, Morgan Stanley said. 
The GMV of the country's top three ecommerce companies exceeded that of the top 10 offline retailers last year, it said. Since the Indian market has huge potential, the opportunities are making "the story compelling for global investors," it said. 

Indian ecommerce market to grow fastest globally over 3 years: Morgan Stanley 
The key growth drivers will be greater Internet penetration, a rise in the number of online shoppers and an increase in per capita income. 
"We now increase our 2020 estimate (of India's ecommerce market) from $102 billion to $119 billion," Morgan Stanley Research said in a report. "This takes our estimate of the total Indian Internet market size from $137 billion to $159 billion (now including online food aggregation business)." Morgan Stanley said a global macroeconomic slowdown could affect the flow of VC/PE money into India, thereby slowing GMV growth and lowering valuations. 

India is adding three Internet users every second and is already the second-largest Internet market globally in terms of users, according to the report dated February 12. 
"We expect Internet penetration to increase from 32% in 2015 to 59% in 2020, translating to a near-doubling of the Internet user base," the US bank said. It estimates India will have almost 320 million online shoppers by 2020 compared with 50 million in 2015. 

"Per capita incomes are likely to double by 2025 and this should drive higher aspirations of the Indian consumer," according to the report. 
The top three online retail platforms dominated the Indian ecommerce market in 2015 with a combined market share of 83%. Flipkart, including Myntra, maintained its No. 1 position with a 45% market share, followed by Snapdeal (ex-Freecharge) at 26% and Amazon India at 12%. Paytm had a 7% share. At $13.8 billion, the GMV of the top three ecommerce companies exceeded that of the top 10 offline retailers at $12.6 billion last year. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


20.2. Amazon to set up its second largest global delivery centre in Hyderabad 
Economic Times | Mar. 04, 2016 

Hyderabad: Global ecommerce giant Amazon has decided to set up its second largest global delivery centre outside the US in Hyderabad, which could attract a large portion of its proposed investments of $2 billion into India. 
The move comes a year after the Seattle-based online market firm's decision to build one of its largest Indian fulfilment centre (warehouse) over an area of 280,000 sq ft near Hyderabad. 

The development also comes close on the heels of Apple choosing Hyderabad to set up its largest technology development centre outside the US and Google announcing to set up a huge campus in the city. A senior Telangana bureaucrat said the state government has allotted a 10-acre land to Amazon where it proposes to build 2.9 million square feet development centre to house a 13,500 member strong team. The current headcount at Amazon development centre at Hyderabad is around 1,000 across multiple offices.

 Amazon to set up its second largest global delivery centre in Hyderabad Indicating a keen interest in the Indian market, Amazon currently has a 30,000 square feet area of office space rented out at ONE BKC Mumbai and a 1.2-million square feet office space leased out in Bengaluru. 
"The land for the facility (at Hyderabad) is currently under a long-lease with the Government of Telangana," said Jayesh Ranjan, Telangana's IT Secretary. A senior government official said Amazon would lay the foundation stone for the proposed global delivery centre on March 30, where its senior VP David Zapolksy and vice president John Morgan are likely to attend. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 



INDIA & THE WORLD 


21. IMF and India to Set-Up a South Asia Regional Training and Technical Assistance Center (SARTTAC) in Delhi 
Livemint | Mar. 14, 2016 

New Delhi: The Union Finance Minister Shri Arun Jaitley and Ms. Christine Lagarde, Managing Director, International Monetary Fund (IMF) signed a Memorandum of Understanding here today to establish a capacity development center in the national capital. 
Speaking on the occasion, Ms Lagarde said “I would like to thank Prime Minister Modi, Finance Minister Jaitley and the Indian Government for offering to host the center and for their substantial financial commitment. This will be the First center that fully integrates training and technical assistance and is a model for our future capacity development work. I would also like to express my appreciation to the other member countries for joining with India, the IMF, and partners like Australia and the Republic of Korea, in making this exciting initiative happen.” 

The South Asia Regional Training and Technical Assistance Center (SARTTAC) is expected to become the focal point for planning, coordinating, and implementing the IMF’s capacity development activities in the region on a wide range of areas, including macroeconomic and fiscal management, monetary operations, financial sector regulation and supervision, and macroeconomic statistics. The Center will help address existing training needs and respond to the demand for IMF training in India, Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka, while bringing the region’s training volume on par with those of other regions. 

The signing of this Memorandum of Understanding (MOU) represents a key step toward a fully integrated capacity development center in New Delhi, and demonstrates the shared commitment between the IMF and its membership in using technical assistance and training as vehicles for economic stability and inclusive growth. SARTTAC will offer courses and seminars for policymakers and other government agencies from the six aforementioned countries. It will build upon the IMF’s in-depth experience with capacity development by drawing on the experiences of the IMF’s Regional Technical Assistance Centers and Regional Training Centers, which have a proven track record of delivering technical assistance on economic institution building. Funding will come from contributions by Regional Member countries and Development Partners. The Australian Agency for International Development, the Republic of Korea and India have pledged financial support for the said Center. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


22. Asia's oil markets in upheaval as China, India change the game 
Reuters, Hindu | 24 Feb. 2016 

Asia's oil markets are being upended as India's and China's refiners overtake once-dominant buyers like Japan and challenge the United States as the world's biggest consumer. 
The shifts are not only establishing new trade routes but are also challenging the way oil is priced in the region as the new players push for more cash cargoes and fewer long-term deals. 
China and India's combined share of world oil consumption has tripled since 1990 to over 16 per cent, nearing the US share of roughly 20 per cent, cementing their status as the main centre of global demand growth. "Asian oil markets are in a tremendous period of flux," said Owain Johnson, managing director of Dubai Mercantile Exchange (DME). 

By 2040, China and India could double their share again to a third, analysts say. 
One of Asia's rising traders is Indian Oil Corp, which operates 11 refineries with a combined capacity of 80.7 million tonnes a year (1.9 million barrels per day), a third of India's capacity and roughly the same size as Exxon's US refining base. 
"Spot crude (trading) gives more flexibility and more variety is available. Last year we raised spot purchases and for this year we are working out a strategy," said its head of finance AK Sharma. 
The changes come at the expense of western majors, with Shell complaining in December that aggressive trading, conducted by Chinese companies, meant Asian crude prices didn't properly reflect the market. "Chinese oil companies have become the new power houses in oil trading," said Oystein Berentsen, managing director of crude at Strong Petroleum in Singapore. 

NEW PRIORITIES 
Previously, Asia's largest oil buyers from Japan - which once accounted for about 10 percent of global demand - stuck with long-term contracts. 
Now, as China and India take the lead, a growing share of trading is done on a spot basis as buyers prioritize cost and delivery flexibility over fixed shipment schedules. 
Moreover, thanks to the hefty volumes, the new buyers are able to extract favourable prices. China and India's combined daily net crude imports exceed 10 million barrels, or some 3 million bpd more than top importer the United States. 
The new buyers are also bringing new characteristics to the marketplace. 

"Indians are more flexible than many of their Asian peers, buying up distressed or stranded cargoes when there's a profitable opportunity," said Ivan Szpakowski, head of Asia commodity research at Citigroup. "India will become the biggest source of oil consumption growth. Its geography also changes trade flows. If you look at a map, the Middle East is much closer to India than to Japan or China and such shipments are effectively short-haul." 
In China, state-owned oil giants have been joined by nearly 20 independent refiners which have been granted import licenses and exclusively buy spot supplies. 
Their arrival is changing trade flows through their preference for cheaply-delivered Russian crudes which has helped Russia challenge the Middle East as China's biggest supplier. 

NEW OIL PRICING? 
Not all is smooth sailing. Richard Gorry, director of JBC Energy Asia, said the rise of these traders is causing "teething problems" as they make their first deals with highly regulated international companies. 
In January, a crude cargo sold to an independent Chinese refiner by western merchants Vitol and Mercuria had to be resold after the firm failed to secure financing, while this month another private Chinese company walked away from a deal to buy $680 million of Russian oil, citing "changes in the market" as a reason. China's national oil firms are also challenging Asia's leading price benchmark, the Dubai Market-on-Close (MoC) by Platts, used to price more than 12 million bpd of crude to Asia, by frequently sweeping up almost all available cargoes, preventing other traders from participating in the pricing process. 

To avoid further squeezes, Platts made more crude available in its MoC, and Dave Ernsberger, head of global oil content at Platts, a subsidiary of McGraw Hill Financial, said it "absolutely makes sense" for China to take "a much more pre-eminent role in price discovery." 
Still, challengers are circling. 
"The old system is no more and the creation of new systems and patterns of behaviours has begun," said Jorge Montepeque, who set up the MoC system for Platts in the 1990s and is now an independent consultant. Keen to play a bigger part in price creation, China plans to launch Shanghai crude futures. 
Other exchanges are also looking to capitalise on the change. 
"China is obviously keen to have an ever greater say in pricing. At the same time, Iran is returning to the market. Firms across Asia are looking at new ways of doing business and legacy arrangements are all under review," DME's Johnson said. 


23. Modi praises Islam for its message of peace, harmony 
PTI, HinduNew Delhi, Mar.17 2016 

Praising Islam for its message of peace and harmony, Prime Minister Narendra Modi today said none of Allah’s 99 names stands for violence and asserted the fight against terrorism is not a confrontation against any religion and the two should be delinked. 
Addressing the first World Sufi Forum, he said, “This is an extraordinary event of great importance to the world, at a critical time for humanity. At a time when the dark shadow of violence is becoming longer, you are the noor, or the light of hope. When young laughter is silenced by guns on the streets, you are the voice that heals.” 

Emphasising advancing of the message of Sufism that stands for the principles of Islam and the highest human values, he chose the occasion to stress that the fight against terrorism is not a confrontation against any religion. “The fight against terrorism is not a confrontation against any religion. 
It cannot be. It is a struggle between the values of humanism and the forces of inhumanity. It is not a conflict to be fought only through military, intelligence or diplomatic means. 
“It is also a battle that must be won through the strength of our values and the real message of religions. As I have said before, we must reject any link between terrorism and religion. Those who spread terror in the name of religion are anti-religious,” he said. 

Terming Sufism, a spiritual quest that traces its origin from the Holy Prophet and the fundamental values of Islam, which literally means peace, Modi said, “And, it reminds us that when we think of the 99 names of Allah, none stand for force and violence, and that the first two names denote compassionate and merciful. Allah is Rahman and Raheem.” 
Earlier Modi was welcomed with the chant of ‘Bharat Mata Ki Jai’ at the forum convened by the All India Ulama and Mashaikh Board, to discuss the role of Sufism in countering rising global terror. 

Modi’s message came at a time when his government has been facing Opposition flak on the issue of communalism and amid a raging debate on nationalism. 
The four-day event, beginning today is being attended by over 200 delegates, including foreign delegates from 20 countries. 
Spiritual leaders, scholars, academicians and theologists from Egypt, Jordan, Turkey, the UK, the US, Canada and Pakistan, among other countries are coming for the event. 
During his around 30-minute speech, Modi quoted a number of Sufi scholars to drive home the message of unity of mankind preached by all religions. 

“When the spiritual love of Sufism, not the violent force of terrorism, flows across the border, this region will be the paradise on earth that Amir Khusrau spoke about... Terrorism divides and destroys us. 
“Indeed, when terrorism and extremism have become the most destructive force of our times, the message of Sufism has global relevance,” he said. 
Noting that every year over 100 billion dollars are spent on securing the world from terrorism, he said that the money should have been spent on building lives of the poor instead. 

In an oblique reference to Pakistan, which has often been accused of harbouring terrorists, Modi said, ”there are forces and groups that are instruments of state policy and design. There are others recruited to the cause in misguided belief.” 
In the backdrop of youths from many countries having joined the ISIS with radicalisation happening through Internet, Modi said while there are some who are trained in organised camps, “there are those who find their inspiration in the border less world of cyber space“. 
“Terrorism uses diverse motivations and causes, none of which can be justified. Terrorists distort a religion whose cause they profess to support. 

“They kill and destroy more in their own land and among their own people than they do elsewhere. And, they are putting entire regions to peril and making the world more insecure and violent,” he said. 
He said that advance the message of Sufism that stands for the principles of Islam and the highest human values is a task that states, societies, sages, scholars and families must pursue. 
Noting that the message of Sufism is not just confined to combating terrorism, the Prime Minister spoke of the “rich diversity” of India stressing that the values of harmony, welfare, compassion and love for human beings are the foundation of a just society. 

He said this is the principle behind his idea of ‘Sab Ka Saath, Sab Ka Vikaas’ 

“And, these values are important to preserve and nurture diversity in our societies. Diversity is a basic reality of Nature and source of richness of a society; and, it should not be a cause of discord. 
“We need just not constitutional provisions or legal safeguards, but also social values to build an inclusive and peaceful society, in which everyone belongs, secure about his rights and confident of her future,” he said. Speaking on the challenge of violence, the Prime Minister underlined the need to remember the teaching of Holy Quran that if anyone slew one innocent person, it would be as if he slew a whole people and if anyone saved one life, it would be as if he saved a whole people. He also underlined the message of non—violence propagated by Lord Buddha and Mahavira. 

“In many parts of the world, there is uncertainty about the future, and how to deal with it as nations and societies. These are precisely the times that the world is most vulnerable to violence and conflicts,” he said. The Prime Minister stressed that the global community to be must be more vigilant than ever before and counter the forces of darkness with the radiant light of human values. 
In his speech, he quoted profusely from the Bible and the Quran apart from Hindu scriptures and referred to Sufi saints and scholars including Hazrat Moinuddin Chishti, Persian Sufi poet Saadi Jalaluddin Rumi to drive home the message of unity. 

Modi also hailed India as “land that is a timeless fountain of peace, and an ancient source of traditions and faiths, which has received and nurtured religions from the world” and its people “with an abiding belief in Vasudhaiva Kutumbakam, the World is one family”. 


24. Global pension, sovereign wealth funds to invest US$50 bn in infra 
Livemint | Mar. 15, 2016 

Mumbai: Global pension funds and sovereign wealth funds may invest up to $50 billion in India’s infrastructure sector over the next five years, a report by investment bank Ambit Corporate Finance and the UK’s City of London said. 
The estimate comes at a time when long-term global investors are looking to invest in new geographies and promoters of many infrastructure companies are looking to sell assets. 
To put things in perspective, infrastructure attracted a meagre $3.7 billion of investment, both domestic and foreign, in 2015, according to data from Equirus Capital Pvt. Ltd, another investment bank. Indian infrastructure firms are trying to sell assets since they have to service long-dated liabilities, said Ambit managing director Rahul Mody. 

“With the infrastructure asset supply becoming scarce in Western markets, there is a significant opportunity to attract meaningful investments for India from these investors,” he said. 
India has attracted the attention of sovereign wealth funds, global pension funds and insurance firms looking for a majority stake in operational infrastructure assets. Such investors could come to the rescue of Indian firms struggling with huge debts and a liquidity crunch. 
Canadian pension funds such as the Canada Pension Plan Investment Board (CPPIB), Caisse de dépôt et placement du Québec (CDPQ) and PSP Investments are already setting up investment offices in India and carrying out due diligence on assets in roads, renewable energy and power transmission and distribution. Other funds from North America, the Middle East, Australia and Asian countries such as Japan, Korea and China are also looking at investment opportunities in the sector. 

As more projects start operating, more deals will happen, Mody said. He expects increased deals in the roads, renewable energy and power transmission and distribution segments. This is because the business dynamics and cash flow profile of these assets match investor expectations, said Mody. 
CPPIB in 2014 committed a Rs.2,000 crore investment in Larsen and Toubro Ltd’s subsidiary L&T IDPL. PSP Investments in November said it would buy a 49% stake in Anil Ambani-led Reliance Infrastructure Ltd’s electricity generation, transmission and distribution business in Mumbai and adjoining areas. CDPQ on 9 March pledged an investment of $150 million in the renewable energy sector. 

According to Ashish Agarwal, director, infrastructure at Equirus Capital, after testing waters over two years ago, global pension funds today are increasingly becoming active on transactions. 
With the government looking to increase infrastructure spending, the global funds could invest in the sector indirectly or even look to buy operational assets such as the ones auctioned by the National Highways Authority of India, Agarwal added. “There is no doubt that there will be huge sums of pension funds money coming directly and indirectly in the infrastructure sector,” he said. 

According to data from Equirus Capital, Indian infrastructure companies in 2015 raised about $3.7 billion from 36 transactions through mergers and acquisitions, initial public offerings, qualified institutional placements and private equity investments. This was 27% higher than the $2.9 billion raised across 23 transactions in 2014. Still, $50 billion could be an aggressive estimate given these investors are particular about investing in low-risk and stable assets. Several private equity investors who invested in the sector in the last decade have not been able to sell their investments, as factors such as delays in land acquisition and environmental approvals cropped up. 

Pension and sovereign funds, however, may fare better as they have a longer time horizon for their investments. Unlike private equity investors, who look to exit investments every few years, large pension funds seek long-term investments and come with a deep pool of capital. They typically look for a 14-15% yield from their investments in India. 
Availability of assets in India with steady cash flows is now becoming aligned with the return expectations of the investors such as the Canadian pension funds, said Manish Agarwal, partner and leader-infrastructure at PwC India. 

India has the capacity to absorb big infrastructure investments to the tune of $50 billion, said R. Venkataraman, senior director at Alvarez and Marsal. 
“Pension funds typically look at long-term investments. Indian infrastructure story fits the bill perfectly to that extent because infrastructure investments take a long time to start giving yields,” he said. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. 


25. World Bank approves US$1.5 billion to support India’s universal sanitation initiatives 
Washington | Dec. 15, 2015 

The World Bank today approved a US$1.5 billion loan for the Swachh Bharat Mission (SBM) Support Operation Project to support the Government of India in its efforts to ensure all citizens in rural areas have access to improved sanitation – such as a toilet or latrine with a focus on changing behaviors – in ending the practice of open defecation by 2019. 
Specifically, this project will support the rural component, known as SBM – Gramin (SBM-G), over a five-year period using a new performance-based program which links funds directly to results, ensuring that benefits are delivered to the people in need – more than 60 percent of India’s rural population. 

Today, of the 2.4 billion people who lack access to improved sanitation globally, more than 750 million live in India, with 80 percent living in rural areas. More than 500 million of the rural population in India continues to defecate in the open, suffering from preventable deaths, illness, stunting, harassment and economic losses. The SBM-G program focuses on ensuring usage of toilets along with their construction. States and their implementing agencies will be given incentives for meeting performance standards. Performance will be measured against the states’ ability to reduce open defecation, sustaining their open defecation free (ODF) status and improving solid and liquid waste management in rural areas. The financing mechanism promotes the leadership of the states, which will have flexibility in innovating and adopting their own delivery models.

One in every ten deaths in India is linked to poor sanitation. And studies show that low-income households bear the maximum brunt of poor sanitation. This project, aimed at strengthening the implementation of the Swachh Bharat Initiative of the government, will result in significant health benefits for the poor and vulnerable, especially those living in rural areas,” said Onno Ruhl, World Bank Country Director for India. “Incentivizing good performance by states and the focus on behavioral changes are two important components of this project,” he added. 

The Ministry of Drinking Water and Sanitation (MDWS) will play the overseeing and coordinating role for the Program and support the participating states. Funds will also be used to develop the capacity of MDWS in program management, advocacy, monitoring and evaluation. 
“India has demonstrated extraordinary leadership in pursuing the ambitious SBM campaign and embracing the focus on behavior to complement the construction of toilets,” said Annette Dixon, World Bank Vice President for the South Asia Region. “It is our privilege to support the Indian government in this initiative and we look forward to working side by side.” 

The World Bank will also provide a parallel US$25 million technical assistance to build the capacity of select state governments in implementing community-led behavioral change programs targeting social norms to help ensure widespread usage of toilets by rural households. 
“This program, built on lessons learnt from global and national sanitation projects, represents a fundamental change in approach and recognizes the importance of coupling investments in the construction of toilets to its usage. For it to succeed, large-scale social mobilization for behavior change is critical at the community level,” said Soma Ghosh Moulik, Lead Water and Sanitation Specialist and the project’s Task Team Leader. “Third party assessments and regular monitoring will provide reliable information on the project’s progress,” she added. 

Progress towards the key indicators – which will form the basis for releasing incentive grants to states – will be measured through independent verification assessments. National Annual Rural Sanitation Surveys will be carried out annually by a third party. 
The project will also finance specific activities to strengthen the current monitoring and evaluation system to capture timely, relevant, and reliable information on the program’s progress. Support will be provided for systematic knowledge sharing and innovation, as well as capacity building and partnership. 
The loan, from the International Bank for Reconstruction and Development (IBRD), has a maturity of 18 years including a grace period of 5 years. 


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